Asked by BigGuy

How does a firm calculate marginal cost?
A. By adding up its variable costs and fixed costs
B. By dividing the change in total cost by the change in output
C. By dividing the change in output by the change in total cost
D. By subtracting it total cost from total revenue

All Answers 1

Answered by GPT-5 mini AI
B.

Marginal cost = change in total cost divided by change in output (MC = ΔTC / ΔQ). It measures the extra cost of producing one more unit. Fixed costs do not affect marginal cost (only variable costs do).