ANSWER: B) The price of producing one additional unit of a good
EXPLANATION: Marginal Cost is the cost of producing one additional unit of goods or service. It is the change in the opportunity cost when one additional unit is added for production. All the costs that involved in producing the extra unit of goods is included in the Marginal Costs whereas the costs which does not have any affect on the number of units produced are called Fixed Costs.
Option b is correct.
The marginal cost is defined as the price of producing one additional unit of good.
Further explanation:
Marginal Cost: It is defined as an additional cost of manufacturing one unit output of the product or service. It is analyzed in order to determine the point at which an organization can attain the economies of scale.
Justification for the correct and incorrect answer:
A.
The possible income from producing an additional item: This option is incorrect.
Marginal cost measures the cost of producing one additional unit of output. The income from manufacturing one additional unit is not measured by the marginal cost.
B.
The price of producing one additional unit of a good: This option is correct.
Marginal cost is defined as an additional cost of manufacturing one unit output of the product or service. It is analyzed in order to determine the point at which an organization can attain the economies of scale.
C.
The additional income gained from selling an additional good: This option is incorrect.
The income which is earned from the sale of an extra unit of the product or service is known as marginal revenue.
D.
The financial gain from business activity minus expenses: This option is incorrect .
The net profit is calculated as the difference between the financial gains and expenses incurred in the particular time period
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Answer details:
Grade: High School
Subject: Economics
Chapter: Production Costs
Keywords: the best definition of marginal cost, the possible income from producing an additional item, the price of producing one additional unit of a good, the additional income gained from selling an additional good, the financial gain from business activity minus expenses.
