Which of the following statements is not true?

a. Marginal cost is the change in a firm's total cost due to a one unit change in output.

b. Costs that are small and unimportant with little impact on profits are called marginal costs.

c. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost.

d. Marginal cost and marginal productivity are inversely related.

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Business

5 February, 11:57

Which of the following statements is not true?

a. Marginal cost is the change in a firm's total cost due to a one unit change in output.

b. Costs that are small and unimportant with little impact on profits are called marginal costs.

c. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost.

d. Marginal cost and marginal productivity are inversely related.

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Answers (1)

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Brennan Freeman · Answer 1

b. Costs that are small and unimportant with little impact on profits are called marginal costs ...

This statement is wrong because the importance or size of the cost has nothing to do with it being marginal. Marginal costs are the extra cost of producing one extra unit. For eg if a company is making 100 units of a good, the cost to make the 101st unit will be the marginal cost of that good.