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

Question

Quizplus · Accepted Answer

Marginal cost is the change in total cost that happens when one more unit of output is produced. It takes into account both variable and fixed costs. Option A is incorrect as it refers to average total cost instead of marginal cost. Option B is incorrect as it only considers the change in variable cost and not the total cost. Option D is incorrect as total fixed cost does not change with changes in output.

Marginal Cost May Be Defined as