The term _____________ is used to describe the additional cost of producing one more unit.

• A. average cost
• B. marginal cost
• C. fixed cost
• D. total cost

Answer: (B)

Verified step by step guidance

1. Understand the concept of cost in production: costs can be divided into fixed costs (which do not change with output) and variable costs (which do change with output).
2. Recognize that total cost is the sum of fixed cost and variable cost at any level of output.
3. Define marginal cost as the additional cost incurred from producing one more unit of output.
4. Express marginal cost mathematically as the change in total cost divided by the change in quantity produced: \(\text{Marginal Cost} = \frac{\Delta \text{Total Cost}}{\Delta Q}\).
5. Note that average cost is different; it is the total cost divided by the quantity produced, not the additional cost of one more unit.