BUSINESS ADMINISTRATION
OFFICE MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -There is a marginal cost when there are changes in the total cost of production. Since fixed costs are constant, they do not contribute to a change in total production costs. Therefore, marginal costs exist when variable costs exist.
Detailed explanation-2: -The correct answer is: B. Marginal Cost is the incremental cost of one unit. Reason: Marginal cost is the additional cost incurred in producing one extra unit of output.
Detailed explanation-3: -The amount of marginal cost varies according to the volume of the good being produced. Marginal cost is an important factor in economic theory because a company that is looking to maximize its profits will produce up to the point where marginal cost (MC) equals marginal revenue (MR).
Detailed explanation-4: -’b. Costs that are small and unimportant with little impact on profits are called marginal costs. ‘ is not a true statement.