What does marginal cost tell us
A)the value of all resources used in a production process
B)the additional profit earned when output is increased by one unit
C)the amount by which total cost rises when output is increased by one unit
D)the amount by which output rises when labour is increased by one unit

Question

Quizplus · Accepted Answer

Marginal cost tells us how much the total cost increases when output is increased by one unit. It helps the producer to make decisions related to the production process, such as how much to produce, where to set the price, and when to stop producing. Marginal cost is an essential concept in microeconomics, and it is calculated by dividing the change in total cost by the change in output.

What Does Marginal Cost Tell Us