__________is defined as the change in total cost as a result of change in the level of output, investment etc.
Incremental cost
Understanding Incremental Cost
The question asks to identify the term that describes the change in total cost resulting from a change in the level of output, investment, or other activities.
Let's look at the options provided:
- Marginal cost: This refers specifically to the change in total cost when one additional unit of output is produced. It is a specific type of cost change focused on a single unit increment.
- Opportunity cost: This is the value of the next best alternative that is given up when a decision is made. It is not about the change in total cost due to changes in output or investment levels.
- Incremental cost: This is defined as the change in total cost that occurs as a result of a specific decision or a change in the level of activity, output, or investment. It measures the additional cost incurred due to a decision to expand or alter operations. For example, the cost increase from undertaking a new project or increasing production from one level to another significantly different level.
- Marginal opportunity cost: This concept is often used in the context of production possibility frontiers and refers to the opportunity cost of producing one additional unit of a good or service, which is the amount of another good or service that must be given up.
Comparing the definition given in the question — "change in total cost as a result of change in the level of output, investment etc." — with the definitions of the options, the term that best fits this description is Incremental cost. While marginal cost is a type of incremental cost (for a one-unit change in output), incremental cost is a broader term covering changes in cost for any significant change in the level of activity, output, or investment.
Important Questions from Miscellaneous
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A railway wagon (open at the top) of mass M1 is moving with speed v1 along a straight track. As a result of rain, after some time it gets partially filled with water so that the mass of the wagon becomes M2 and speed becomes v2. Taking the rain to be falling vertically and the water stationery inside the wagon, the relation between the two speeds v1 and v2 is :
Consider the following statements:
1. Distance between the longitudes becomes zero on North Pole and South Pole.
2. Distance between the longitudes is maximum on the Equator.
3. Number of longitudes is more than number of latitudes.
Which of the statements given above is/are correct?
One block of 2⋅0 kg mass is placed on top of another block of 3⋅0 kg mass. The coefficient of static friction between the two blocks is 0⋅2. The bottom block is pulled with a horizontal force F such that both the blocks move together without slipping. Taking acceleration due to gravity as 10 m/s2, the maximum value of the frictional force is :
