If a firm wanted to know how much it would save by producing one less unit of output, it would look to:?

Question

a. Marginal Cost

b. Average Total Cost

c. Average Variable Cost

d. Average Fixed cost

Answer 1

"A" is right one.

Answer 2

The correct answer is a. Marginal Cost.

However, one may save on costs by reducing output by one unit, it will also lose revenue. If the loss in revenue, reflected by marginal revenue, is more than the saving in cost, the firm will actually lose in terms of lowering its profits.

So, strictly speaking, the question should be worded differently, unless of couse the question is simply asked to give some points to a certain answerer.