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?
-$0.10
-$0.05
-$100
-$2100
To find the marginal cost of increasing production from 3,000 to 5,000 units, we need to calculate the total cost of producing 5,000 units and subtract the total cost of producing 3,000 units.
Total cost of producing 5,000 units:
Fixed Cost + (Variable Cost * Number of Workers)
= $2000 + (300 * 5)
= $3500
Total cost of producing 3,000 units:
Fixed Cost + (Variable Cost * Number of Workers)
= $2000 + (100 * 3)
= $2300
Marginal cost = Total cost of producing 5,000 units - Total cost of producing 3,000 units
= $3500 - $2300
= $1200
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is $1200.
To determine the marginal cost of increasing production from 3,000 to 5,000 units, we need to calculate the change in cost divided by the change in quantity.
First, let's find the total cost for each level of production:
For 3,000 units:
Fixed Cost: $2,000
Variable Cost: $100 * 3 = $300
Total Cost: $2,000 + $300 = $2,300
For 5,000 units:
Fixed Cost: $2,000
Variable Cost: $100 * 5 = $500
Total Cost: $2,000 + $500 = $2,500
Now, let's calculate the change in cost and the change in quantity:
Change in Cost: $2,500 - $2,300 = $200
Change in Quantity: 5,000 - 3,000 = 2,000 units
Finally, let's calculate the marginal cost:
Marginal Cost = Change in Cost / Change in Quantity
Marginal Cost = $200 / 2,000 units = $0.10
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is -$0.10.
To calculate the marginal cost of increasing production from 3,000 to 5,000 units, we need to find the change in total cost and divide it by the change in quantity.
First, let's calculate the total cost at 3,000 units:
Fixed Cost = $2,000
Variable Cost = $100 per unit
Number of workers = 10
Total Variable Cost at 3,000 units = 3,000 units * $100 per unit = $300,000
Total Cost at 3,000 units = Fixed Cost + Total Variable Cost = $2,000 + $300,000 = $302,000
Next, let's calculate the total cost at 5,000 units:
Fixed Cost = $2,000
Variable Cost = $100 per unit
Number of workers = 20
Total Variable Cost at 5,000 units = 5,000 units * $100 per unit = $500,000
Total Cost at 5,000 units = Fixed Cost + Total Variable Cost = $2,000 + $500,000 = $502,000
Now, let's find the change in total cost and the change in quantity:
Change in Total Cost = Total Cost at 5,000 units - Total Cost at 3,000 units
= $502,000 - $302,000
= $200,000
Change in Quantity = 5,000 units - 3,000 units
= 2,000 units
Finally, to find the marginal cost, we divide the change in total cost by the change in quantity:
Marginal Cost = Change in Total Cost / Change in Quantity
= $200,000 / 2,000 units
= $100
Therefore, the marginal cost of increasing production from 3,000 to 5,000 units is $100.