Which term describes 'Extra cost of producing one additional unit of production'?

Which term describes 'Extra cost of producing one additional unit of production'?

• A. Economics
• B. Marginal Cost
• C. Scarce
• D. Market

Answer: (B)

The concept being tested is the extra cost of producing one more unit, which is known as marginal cost. Marginal cost measures how total cost changes when output increases by a single unit (ΔTC/ΔQ). It’s central to production decisions because firms compare marginal cost to marginal revenue: if the revenue from one more unit exceeds its cost, increasing output adds profit; if not, production should not expand. The other terms refer to broader ideas—economics is the study of how scarce resources are allocated, scarce describes limited resources, and market is the arena where buyers and sellers interact, not a specific cost per unit.

The concept being tested is the extra cost of producing one more unit, which is known as marginal cost. Marginal cost measures how total cost changes when output increases by a single unit (ΔTC/ΔQ). It’s central to production decisions because firms compare marginal cost to marginal revenue: if the revenue from one more unit exceeds its cost, increasing output adds profit; if not, production should not expand. The other terms refer to broader ideas—economics is the study of how scarce resources are allocated, scarce describes limited resources, and market is the arena where buyers and sellers interact, not a specific cost per unit.