Answer (C) is correct . A marginal cost is the sum of the costs necessary to effect a one-unit increase in the activity level.
Answer (A) is incorrect because Differential (or incremental) cost is the difference in total cost between two decisions.
Answer (B) is incorrect because Opportunity cost is the maximum benefit forgone by using a scarce resource for a given purpose. It is the benefit, for example, the contribution to income, provided by the best alternative use of that resource.
Answer (D) is incorrect because Differential (or incremental) cost is the difference in total cost between two decisions.
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