Marginal cost may be defined as the:
A)rate of change in fixed costs that results from producing one more unit of output
B)change in total cost that results from producing one more unit of output
C)change in average variable cost that results from producing one more unit of output
D)change in average cost that results from producing one more unit of output
E)change in average fixed cost that results from producing one more unit of output

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost incurred by producing one additional unit of output. Therefore, it is the change in total cost that results from producing one more unit of output. A is incorrect because fixed costs do not change with the level of output. C and E are incorrect because they refer to average costs, not marginal costs. D is also incorrect because it refers to average cost, which is the total cost per unit of output, rather than the additional cost of producing one more unit.

Marginal Cost May Be Defined as The