Number of workers: 10, 20, 30
Output(thousands): 3, 5, 6
Fixed Cost ($): 2000, 2000, 2000
Variable Cost ($): 100, 200, 300
In the table above, what is the marginal cost of increasing production from 3,000 to 5,000 units?
To find the marginal cost of increasing production from 3,000 to 5,000 units, we need to identify the change in total cost.
First, we need to calculate the total cost for producing 3,000 units and the total cost for producing 5,000 units.
For 3,000 units:
Fixed Cost = $2000
Variable Cost per unit = $100
Number of units = 3,000
Total variable cost = Variable cost per unit * Number of units = $100 * 3,000 = $300,000
Total cost for producing 3,000 units = Fixed Cost + Total variable cost = $2000 + $300,000 = $302,000
For 5,000 units:
Fixed Cost = $2000
Variable Cost per unit = $100
Number of units = 5,000
Total variable cost = Variable cost per unit * Number of units = $100 * 5,000 = $500,000
Total cost for producing 5,000 units = Fixed Cost + Total variable cost = $2000 + $500,000 = $502,000
The change in total cost when increasing production from 3,000 to 5,000 units is:
Change in total cost = Total cost for producing 5,000 units - Total cost for producing 3,000 units
= $502,000 - $302,000
= $200,000
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is $200,000.
To find the marginal cost of increasing production from 3,000 to 5,000 units, we need to calculate the change in total cost when the output increases by 2,000 units.
First, we need to calculate the total cost for producing 3,000 units and 5,000 units separately.
For 3,000 units:
Fixed Cost = $2,000
Variable Cost = $100 per unit
Total Variable Cost = Variable Cost * Output = $100 * 3,000 = $300,000
Total Cost = Fixed Cost + Total Variable Cost = $2,000 + $300,000 = $302,000
For 5,000 units:
Fixed Cost = $2,000
Variable Cost = $100 per unit
Total Variable Cost = Variable Cost * Output = $100 * 5,000 = $500,000
Total Cost = Fixed Cost + Total Variable Cost = $2,000 + $500,000 = $502,000
To calculate the marginal cost, we subtract the total cost of producing 3,000 units from the total cost of producing 5,000 units:
Marginal Cost = Total Cost (5,000 units) - Total Cost (3,000 units)
= $502,000 - $302,000
= $200,000
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is $200,000.
To calculate the marginal cost of increasing production from 3,000 to 5,000 units, we need to determine the total cost of producing 5,000 units and subtract the total cost of producing 3,000 units.
First, let's calculate the total cost of producing 3,000 units using the given information:
Fixed Cost = $2,000
Variable Cost per unit = $100
Total Variable Cost for 3,000 units = Variable Cost per unit * Number of units = $100 * 3,000 = $300,000
Total Cost for 3,000 units = Fixed Cost + Total Variable Cost = $2,000 + $300,000 = $302,000
Now, let's calculate the total cost of producing 5,000 units:
Fixed Cost = $2,000
Variable Cost per unit = $100
Total Variable Cost for 5,000 units = Variable Cost per unit * Number of units = $100 * 5,000 = $500,000
Total Cost for 5,000 units = Fixed Cost + Total Variable Cost = $2,000 + $500,000 = $502,000
To find the marginal cost of increasing production from 3,000 to 5,000 units, we subtract the total cost of producing 3,000 units from the total cost of producing 5,000 units:
Marginal Cost = Total Cost (5,000 units) - Total Cost (3,000 units)
Marginal Cost = $502,000 - $302,000
Marginal Cost = $200,000
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is $200,000.