Marginal Cost Is Defined as

question 198

Multiple Choice

Marginal cost is defined as

• A) total variable cost resulting from a one-unit increase in quantity.
• B) quantity resulting from a one-unit increase in total variable cost.
• C) the change in total cost resulting from a one-unit increase in the change in quantity.
• D) the change in quantity resulting from a one-unit increase in the change in total variable cost.

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Definitions:

Diminishing Marginal Product

The principle that as more of a variable input is added to a fixed input, the additional output produced from each new unit of input will eventually decrease.

Production Function

A production function describes the relationship between inputs used in production and the output generated from those inputs.

Marginal Product

The additional output gained by adding one more unit of a specific input, keeping all other inputs constant.

Profitability

A measure of the ability of a company or a business sector to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.