Marginal Cost Is the

question 223

Multiple Choice

Marginal cost is the

• A)change in total cost resulting from the purchase of one more unit of the variable input.
• B)change in total cost resulting from the production of one more unit of output.
• C)difference between total fixed cost and total variable cost.
• D)difference between total cost and total expenditure.

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Definitions:

Marginal Benefit

The extra pleasure or benefit gained from consuming an additional unit of a product or service.

Marginal Cost

The added financial burden of producing another unit of a product or service.

Efficient Price

The price at which the supply of a good matches its demand, leading to an optimal distribution of resources in a market.

Consumer Surplus

Consumer surplus represents the discrepancy between what consumers are prepared and capable of spending for a product or service and the actual amount they end up paying.