What is the marginal cost of producing one additional unit if the total cost of producing 100 units is $1,000 and the total cost of producing 101 units is $1,020?
Practice Questions
1 question
Q1
What is the marginal cost of producing one additional unit if the total cost of producing 100 units is $1,000 and the total cost of producing 101 units is $1,020?
$20
$10
$30
$15
The marginal cost is the change in total cost divided by the change in quantity. Here, it is ($1,020 - $1,000) / (101 - 100) = $20.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the marginal cost of producing one additional unit if the total cost of producing 100 units is $1,000 and the total cost of producing 101 units is $1,020?
Solution: The marginal cost is the change in total cost divided by the change in quantity. Here, it is ($1,020 - $1,000) / (101 - 100) = $20.
Steps: 8
Step 1: Identify the total cost of producing 100 units, which is $1,000.
Step 2: Identify the total cost of producing 101 units, which is $1,020.
Step 3: Calculate the change in total cost by subtracting the cost of 100 units from the cost of 101 units: $1,020 - $1,000.
Step 4: Perform the subtraction: $1,020 - $1,000 = $20.
Step 5: Identify the change in quantity, which is the difference between 101 units and 100 units: 101 - 100.
Step 6: Perform the subtraction: 101 - 100 = 1.
Step 7: Calculate the marginal cost by dividing the change in total cost by the change in quantity: $20 / 1.
