Let's examine the given options to understand the difference between marginal cost and marginal revenue.
1. Option 1: Marginal cost is the money earned from selling one more unit of a good. Marginal revenue is the money paid for producing one more unit of a good.
- This statement is incorrect. Marginal cost is not about earnings from sales; it is about the expense incurred in production. Marginal revenue is not related to production costs.
2. Option 2: Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
- This statement is correct. Marginal cost refers to the additional cost of producing one extra unit of a product. Marginal revenue refers to the additional income received from selling that extra unit.
3. Option 3: Marginal cost is the money a producer might make from one more unit. Marginal revenue is the money a producer actually makes from one more unit.
- This statement is misleading. Marginal cost pertains to costs, not earnings or potential earnings. Marginal revenue pertains to actual income from sales, not just a possibility.
4. Option 4: Marginal cost is the money a producer actually makes from one more unit. Marginal revenue is the money a producer might make from one more unit.
- This statement is also incorrect. Marginal cost should refer to production costs, not income. Marginal revenue should reflect actual income from sales, not potential earnings.
After evaluating all the options, the correct statement is:
Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
