Which of the following best describe the term marginal cost or incremental cost.
A) Investigation of what happens to NPV when only one variable is changed.
B) The determination of what happens to NPV estimates when we ask what-if questions.
C) The degree to which a firm or project relies on fixed costs.
D) The change in costs that occurs when there is a small change in output.
E) Taking into account the managerial options that are implicit in a project.

Question

Quizplus · Accepted Answer

Marginal or incremental cost refers to the change in total cost that arises when the quantity produced changes by one unit. It is essentially the cost of producing one additional unit of a good or service.

Which of the Following Best Describe the Term Marginal Cost