The cost of producing one more unit of a good or service is equal to its
A) marginal benefit.
B) producer surplus.
C) marginal expenditure.
D) consumer surplus.
E) marginal cost.

Question

Quizplus · Accepted Answer

The cost of producing one more unit is known as marginal cost. Therefore, the correct option is E. Marginal benefit is the additional benefit received from consuming one more unit of a good, producer surplus is the difference between the price received by the producer and the minimum price they were willing to accept, marginal expenditure refers to the additional cost incurred by the producer to produce one more unit, and consumer surplus is the difference between the maximum price consumers are willing to pay and the actual market price they pay. None of these options accurately describe the cost of producing one more unit.

The Cost of Producing One More Unit of a Good