A firm's marginal cost is:
A) the ratio of the change in total cost to the change in the quantity of output.
B) the change in total cost divided by the change in labour input.
C) the slope of the average fixed cost curve.
D) total cost divided by output.

Question

Quizplus · Accepted Answer

Marginal cost is defined as the additional cost incurred to produce one more unit of output. Therefore, it is the ratio of the change in total cost to the change in the quantity of output. Choices B and D relate to other cost-related concepts, while choice C refers to the slope of the average fixed cost curve, not the marginal cost.

A Firm's Marginal Cost Is