The Amount That an Additional Unit of a Factor Adds

question 116

Multiple Choice

The amount that an additional unit of a factor adds to a firm's total revenue is called the:

• A)marginal revenue.
• B)marginal cost.
• C)additional revenue product.
• D)value of the marginal product.

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Definitions:

ATC

Average Total Cost is the sum of all production expenses divided by the quantity of output produced, representing the per unit cost of production.

Barrier To Entry

Factors that prevent or hinder new competitors from easily entering an industry or area of business.

Advertising

The task or career of generating marketing materials for business products or offerings.

Marginal Cost

The additional cost incurred to produce one more unit of a good or service, critical for decisions on production levels.