Suppose that when the level of output for the firm increases from 50 to 60 units, its variable costs increase from $500 to $700. What is the firm's marginal cost?

Question

Suppose that when the level of output for the firm increases from 50 to 60 units, its variable costs increase from $500 to $700. What is the firm's marginal cost?

Part 2
A.
$115
B.
$10
C.
$20
D.
$5

Answer 1

To calculate the firm's marginal cost, we need to find the change in variable costs divided by the change in output.

Change in variable costs = $700 - $500 = $200
Change in output = 60 - 50 = 10 units

Marginal cost = Change in variable costs / Change in output
Marginal cost = $200 / 10 units
Marginal cost = $20

Therefore, the firm's marginal cost is $20. Answer choice C.

Suppose that when the level of output for the firm increases from 50 to 60​ units, its variable costs increase from​ $500 to​ $700. What is the​ firm's marginal​ cost?

To calculate the firm's marginal cost, we need to find the change in variable costs divided by the change in output.

Suppose that when the level of output for the firm increases from 50 to 60 units, its variable costs increase from $500 to $700. What is the firm's marginal cost?