What is the term for the additional cost of producing one more unit of output?

The term for the additional cost of producing one more unit of output is known as marginal cost. Marginal cost is a key concept in economics and refers to the change in total cost that arises when the quantity produced is increased by one unit. It is crucial for firms in determining their production levels and pricing strategies.

Understanding marginal cost helps businesses make informed decisions about scaling production. If the marginal cost of producing an additional unit is low, it may be beneficial for a firm to increase production to maximize profits. Conversely, if the marginal cost is high, the firm may choose to limit output to avoid incurring excessive costs.

The other terms listed, such as marginal revenue, total cost, and variable cost, refer to different economic concepts. Marginal revenue refers to the additional revenue that a firm earns from selling one more unit of output, total cost is the complete cost of production including fixed and variable costs, and variable cost involves costs that change with the level of output. Each of these plays a different role in economic analysis, but they do not specifically define the additional cost associated with producing one more unit as marginal cost does.