WAEC Economics 1995 Question 15

Question 15

Theory of Costs and Revenue

Which of the following explains marginal cost?

  1. A.Overhead costs plus variable costs resulting from production
  2. B.The average cost of producing more units of the product
  3. C.The extra cost of producing more units of the product
  4. D.Overhead cost minus variable costs
  5. E.The addition to total cost resulting from the production of an additional unit
Show the answer and explanation

Answer: E (The addition to total cost resulting from the production of an additional unit)

Explanation

Marginal cost is the change in total cost when one more unit is produced.