Marginal cost is:

A Total cost divided by quantity

B The additional cost of producing one more unit of output

C Fixed cost per unit

D Average variable cost

✓ Correct Answer: Option B

MC = ΔTC/ΔQ. The change in total cost from producing one additional unit. Firms maximize profit where MR = MC. MC curve is U-shaped due to diminishing returns.

💡 Why is B) the correct answer?

The correct answer to the question "Marginal cost is:" is Option B: The additional cost of producing one more unit of output.

The other options — A) Total cost divided by quantity, C) Fixed cost per unit, D) Average variable cost — are incorrect for this Pre-MBA Exam Prep question. As explained above: MC = ΔTC/ΔQ. The change in total cost from producing one additional unit. Firms maximize profit where MR = MC. MC curve is U-shaped due to diminishing returns.

📚 About This Pre-MBA Exam Prep Practice Question

This 1-level Pre-MBA Exam Prep question from the Economics topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Marginal cost is:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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