Marginal cost is equal to the:
A) change in total variable cost divided by the change in output.
B) total variable cost divided by the level of output.
C) price of the input divided by the average product of the variable input.
D) price of the input divided by the total product of the variable input.
E) total variable cost divided by the change in output levels.

Question

Quizplus · Accepted Answer

Marginal cost is the cost of producing one additional unit of output. It is calculated by dividing the change in total variable cost by the change in output. Therefore, choice (A) is the correct answer. Choice (B) is the calculation for average variable cost, and choices (C) and (D) are not accurate determinants of marginal cost. Choice (E) is close, but it has the variables reversed. The correct calculation is change in total variable cost divided by the change in output, not the other way around.

Marginal Cost Is Equal to The