ECONOMICS
ENTREPRENEURS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The change in the cost of producing one more unit of product
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The cost of total overhead due to changes in production levels
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The change in total production cost when the quantity produced changes by one unit.
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None of the above
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Detailed explanation-1: -What Is Marginal Cost? In economics, the marginal cost is the change in total production cost that comes from making or producing one additional unit. To calculate marginal cost, divide the change in production costs by the change in quantity.
Detailed explanation-2: -In economics, marginal cost is the change in the total cost when the quantity produced changes by one unit. It is the cost of producing one more unit of a good. Marginal cost includes all of the costs that vary with the level of production.
Detailed explanation-3: -Marginal cost is the increment in cost that occurs when the output produced is increased by one unit. More formally, it is the derivative of the total cost function with respect to output.
Detailed explanation-4: -Generally, the marginal cost of production tends to rise as the quantity being produced goes up. Through marginal cost, the manufacturer can determine how to allocate resources among the production units and maximize output.
Detailed explanation-5: -Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is also known as incremental cost.