The accompanying table shows a pizzeria's fixed cost and variable cost at different levels of output. Pizzas sell for $20 each.
Between 25 and 50 pizzas per day, the pizzeria's marginal cost is ________.
A)$4
B)$6
C)$8
D)$16

Question

The accompanying table shows a pizzeria's fixed cost and variable cost at different levels of output. Pizzas sell for $20 each.   
Between 25 and 50 pizzas per day, the pizzeria's marginal cost is ________.
A)$4 
B)$6 
C)$8 
D)$16

Quizplus · Accepted Answer

Marginal cost is the change in total cost divided by the corresponding change in output as output changes from one level to another. The total cost of making 25 pizzas is $650 (= $500 + $150), and the total cost of making 50 pizzas is $750 (= $500 + $250). Thus, as number of pizzas goes from 25 to 50, marginal cost is $4 (= ($750 - $650)/(50 - 25)).

The Accompanying Table Shows a Pizzeria's Fixed Cost and Variable