In the short run, a firm's total costs of producing the hundredth unit of output equal $8 comma 000
.
If it produces one more unit, its total costs will increase to $8 comma 200
.
Part 2
What is the marginal cost of the 101 Superscript st
unit of output?
The marginal cost of the 101st unit of output is the change in total cost divided by the change in quantity.
Change in total cost = $8,200 - $8,000 = $200
Change in quantity = 101 - 100 = 1
Marginal cost = Change in total cost / Change in quantity = $200 / 1 = $200
To find the marginal cost of the 101st unit of output, we need to calculate the change in total cost when the firm produces one more unit.
Change in Total Cost = Total Cost of 101st unit - Total Cost of 100th unit
Total Cost of 101st unit = $8,200
Total Cost of 100th unit = $8,000
Change in Total Cost = $8,200 - $8,000 = $200
Therefore, the marginal cost of the 101st unit of output is $200.
To calculate the marginal cost of the 101st unit of output, we need to look at the change in total cost when producing that additional unit.
In this case, we know that the total cost of producing the 100th unit is $8,000 and the total cost of producing the 101st unit is $8,200.
To find the marginal cost, we need to subtract the total cost of producing the 100th unit from the total cost of producing the 101st unit.
Marginal Cost = Total Cost of Producing 101st Unit - Total Cost of Producing 100th Unit
Marginal Cost = $8,200 - $8,000
Marginal Cost = $200
Therefore, the marginal cost of the 101st unit of output is $200.