Define Marginal Cost (Topic: Producer's Behaviour)
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Marginal Cost is the change in the opportunity cost that arises when the quantity produced is incremented by one unit, that is, it is the cost of producing one more unit of good.
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Marginal Cost :
Cost of Marginal cost or the last unit produced, also defined as the cost of one more or one less unit produced besides existing level of production.
* The increase or decrease in the total cost of a production run for making one additional unit of an item
A application of marginal cost
* Cost Control
* Profit Planning
* Evaluation of Performance
* Decision Making
* Fixation of selling price
* Suitable product tax.
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