Question

∆Total cost/∆q = ?

• A. Average cost
• B. Marginal cost
• C. Total variable cost
• D. None of these

Hint:

Marginal cost is the additional cost incurred from producing one more unit of output and is calculated as the change in total cost divided by the change in quantity.

Answer 1

The Correct Option is B

Step 1: Understanding marginal cost.
Marginal cost is the change in total cost that arises when the quantity produced changes by one unit. It is calculated by the change in total cost divided by the change in quantity (\( \Delta \text{Total cost} / \Delta q \)).

Step 2: Analyzing the options.
(A) Average cost: Average cost is calculated as total cost divided by the quantity produced. It is not the same as marginal cost.
(B) Marginal cost: Correct. Marginal cost is the change in total cost divided by the change in quantity.
(C) Total variable cost: Total variable cost is the total cost incurred for variable inputs, but it is not the same as marginal cost.
(D) None of these: This is incorrect because the correct answer is (B).

Step 3: Conclusion.
The correct formula for \( \Delta \text{Total cost} / \Delta q \) is marginal cost. Therefore, the correct answer is (B) Marginal cost.