Marginal cost is:
A) always less than average variable cost.
B) more affected by fixed costs than by variable costs.
C) the change in total cost that results from producing one more unit.
D) the point where the firm's total cost will just equal total revenue.
E) the extra profit on the last unit.

Question

Quizplus · Accepted Answer

Marginal cost is the cost of producing one more unit and is calculated by taking the change in the total cost and dividing it by the change in quantity. It is not always less than average variable cost (A), nor is it more affected by fixed costs than variable costs (B). It is also not the same as the point of profit maximization (D) or the extra profit on the last unit (E).

Marginal Cost Is