Questions: Which of the following industries has a marginal cost that is close to zero? (A) automobile (B) aircraft (C) software (D) furniture

The answer is (C): software.

Explanation for each option:

(A) Automobile: The automobile industry involves significant costs for materials, labor, and manufacturing processes. Each additional car produced incurs substantial costs, so the marginal cost is not close to zero.

(B) Aircraft: Similar to automobiles, the aircraft industry involves high costs for materials, labor, and complex manufacturing processes. The marginal cost of producing an additional aircraft is substantial.

(C) Software: The software industry typically has a marginal cost close to zero. Once the software is developed, distributing additional copies to clients involves minimal costs, such as server and bandwidth expenses, which are relatively low.

(D) Furniture: The furniture industry involves costs for materials, labor, and production. Each additional piece of furniture produced incurs these costs, so the marginal cost is not close to zero.

In summary, the software industry is characterized by a marginal cost that is close to zero due to the nature of digital distribution and minimal additional costs for serving more clients.