Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Average Cost
B
Fixed Cost
C
Benefit Cost
D
Opportunity Cost
Understanding the Answer
Let's break down why this is correct
Answer
Marginal cost refers to the extra cost of producing one more unit of a good or service. In this comparison, total cost represents all the expenses involved in producing a certain number of units. Therefore, if we think about the additional cost of producing one more unit, we can relate it to the concept of average cost. So, additional unit cost would be similar to average cost, which is the total cost divided by the number of units produced. For example, if producing 10 toys costs $100, the average cost per toy is $10, and if you want to find the cost of producing the 11th toy, you would look at how much the total cost changes when you make that extra toy.
Detailed Explanation
Average cost is what you pay for each unit when you divide total costs by the number of units. Other options are incorrect because Fixed costs are expenses that do not change with the number of units made; Benefit cost isn't a standard term in economics.
Key Concepts
Marginal Costs
Total Costs
Cost Structures
Topic
Calculating Marginal Costs
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.