The marginal cost curve shows the relationship between:

• A. the average cost and the average revenue for each unit produced
• B. the total cost and the total revenue at each level of output
• C. the quantity of output produced and the additional cost of producing one more unit
• D. the price of the product and the quantity demanded

Answer: (C)

Verified step by step guidance

1. Understand the definition of the marginal cost (MC) curve: it represents how the cost changes when producing one additional unit of output.
2. Recall that marginal cost is calculated as the change in total cost divided by the change in quantity produced, expressed as \( MC = \frac{\Delta TC}{\Delta Q} \).
3. Recognize that the marginal cost curve plots the relationship between the quantity of output produced (Q) on the horizontal axis and the additional cost of producing one more unit (MC) on the vertical axis.
4. Compare this with other cost and revenue concepts: average cost relates total cost to output, average revenue relates total revenue to output, and price relates to quantity demanded, which are different from marginal cost.
5. Conclude that the marginal cost curve specifically shows the relationship between the quantity of output produced and the additional cost of producing one more unit.