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? Choose from answers below.
-$0.10
-$0.05
-$100
-$2100
The marginal cost is the change in cost divided by the change in quantity produced. In this case, the change in quantity produced is 2000 units (5000 - 3000). The change in cost is the difference between the cost of producing 5000 units and the cost of producing 3000 units.
The cost of producing 3000 units is ($2000 + $100 * 3000) = $5000.
The cost of producing 5000 units is ($2000 + $100 * 5000) = $7000.
Therefore, the change in cost is $7000 - $5000 = $2000.
Now, we can calculate the marginal cost:
Marginal Cost = Change in Cost / Change in Quantity Produced
Marginal Cost = $2000 / 2000 = $1
So, the marginal cost of increasing production from 3000 to 5000 units is $1.
Therefore, the correct answer is not included in the options provided.
To find the marginal cost of increasing production from 3,000 to 5,000 units, we need to calculate the change in total cost.
The total cost is given by the sum of fixed cost and variable cost. The fixed cost remains constant at $2,000 in each scenario. The variable cost can be calculated by multiplying the number of units by the variable cost per unit.
For 3,000 units:
Variable cost = 3,000 x $100 = $300,000
Total cost = fixed cost + variable cost = $2,000 + $300,000 = $302,000
For 5,000 units:
Variable cost = 5,000 x $100 = $500,000
Total cost = fixed cost + variable cost = $2,000 + $500,000 = $502,000
To find the marginal cost, we subtract the total cost at 3,000 units from the total cost at 5,000 units:
Marginal cost = Total cost at 5,000 units - Total cost at 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.
None of the provided answer choices (-$0.10, -$0.05, -$100, -$2100) are correct.
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 from 3 (thousand) to 5 (thousand) units.
First, let's calculate the total cost for each level of output using the given fixed and variable costs:
Total Cost (3,000 units) = Fixed Cost + (Variable Cost * Output)
Total Cost (3,000 units) = 2000 + (100 * 3) = 2000 + 300 = 2300 (thousand)
Total Cost (5,000 units) = Fixed Cost + (Variable Cost * Output)
Total Cost (5,000 units) = 2000 + (100 * 5) = 2000 + 500 = 2500 (thousand)
Now, let's calculate the change in total cost:
Change in Total Cost = Total Cost (5,000 units) - Total Cost (3,000 units)
Change in Total Cost = 2500 - 2300 = 200 (thousand)
The marginal cost of increasing production from 3,000 to 5,000 units is $200,000.
Since none of the provided answer options match this result, the correct answer is not available.