Marginal cost equals
A) the profitability derived from producing another unit of output.
B) all the opportunity cost of producing the amount of output.
C) or exceeds the marginal benefit.
D) productive efficiency.
E) the opportunity cost of producing one more unit of output.

Question

Quizplus · Accepted Answer

Marginal cost refers to the additional cost incurred in producing one more unit of output. This cost includes the opportunity cost of using resources to produce that additional unit of output. Therefore, the best choice is E, which states that marginal cost equals the opportunity cost of producing one more unit of output. Choices A, B, C, and D are incorrect because they do not accurately describe the concept of marginal cost.

Marginal Cost Equals