Geometrically, marginal cost at any level of output may be interpreted as the slope of

Question

Quizplus · Accepted Answer

Marginal cost is defined as the additional cost incurred to produce one more unit of output. Geometrically, this can be represented as the slope of the total cost curve at that level of output. Option A is incorrect because a ray is a straight line that starts from the origin and goes to infinity, whereas marginal cost is calculated at a specific level of output. Option B is incorrect because the average variable cost curve may not have a constant slope at all levels of output. Option D is incorrect because the slope of the isoquant measures the rate at which one input can be substituted for another while holding output constant, which is not the same as the marginal cost.

Geometrically, Marginal Cost at Any Level of Output May Be