What does marginal cost measure?
What will be an ideal response?
Marginal cost is the increase in total cost, which results from producing one more unit of output. Marginal costs reflect changes in variable costs.
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In the above figure, if d3 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A) A B) B C) C D) D
In the long-run, a perfectly competitive firm will leave the market if it is unable to cover all of its fixed costs
a. True b. False Indicate whether the statement is true or false
Which of the following is most important for the growth of income and full realization of an economy's potential?
a. a positive rate of time preference that motivates a high rate of current consumption b. low real interest rates c. the use of central planning to allocate investment funds d. a mechanism capable of attracting savings and channeling them into investment projects that create wealth
When people try to benefit from a public good without paying for it, we call it the:
A. free-rider problem. B. duopolists' dilemma. C. public goods problem. D. taxation problem.