What is the term for the extra cost of producing one more unit of output?
A. Variable cost
B. Fixed cost
C. Marginal cost
D. Total cost

Define variable, fixed, marginal, and total costs.
Recognize that marginal cost is the change in total cost from producing one more unit.
Identify marginal cost as the correct term.
Conclude that the answer is marginal cost Marginal cost ​ .

Explanation

Understanding the Question The question asks us to identify the term that describes the additional cost incurred when producing one more unit of a product or service. We need to consider the definitions of the provided cost terms to determine the correct answer.

Defining Cost Terms Let's define each of the cost terms:



Variable cost: These are costs that change depending on the volume of production. For example, the cost of raw materials.
Fixed cost: These costs remain constant regardless of the production level, such as rent or salaries.
Marginal cost: This is the increase in total cost resulting from producing one additional unit of output.
Total cost: This represents the entire cost of production at a specific output level, including both fixed and variable costs.


Identifying the Correct Term Based on these definitions, the term that specifically refers to the extra cost of producing one more unit of output is marginal cost .

Final Answer Therefore, the correct answer is Marginal cost.


Examples
In a bakery, if the total cost to bake 100 cakes is $150, and the total cost to bake 101 cakes is $151.25, the marginal cost of the 101st cake is $1.25. Understanding marginal cost helps businesses make decisions about production levels and pricing strategies. For instance, a company might decide to increase production if the marginal cost is lower than the expected revenue from selling that additional unit.

Answered by GinnyAnswer | 2025-07-04

The term for the extra cost of producing one more unit of output is known as Marginal Cost . This cost is essential for businesses to evaluate production and pricing strategies. Therefore, the correct answer is C. Marginal cost .
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Answered by Anonymous | 2025-07-06