The Marginal cost (MC) is the cost of producing the last unit of output. It tells us how the total cost (and the total variable cost) changes as the output changes. The marginal cost is calculated as the increase in the total cost (or total variable cost) divided by the increase in the output. Marginal cost measures how fast or slow the total cost and the total variable cost increase. The slower the increase, the lower the marginal cost. Also, when the marginal cost is lower than the average cost and the average variable cost, it pulls them down as the output increases. Conversely, when the marginal cost is higher than both average costs, it pulls them up as the output becomes larger. The correct answer is D.