The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1

-Refer to Table 8.1. What is the marginal cost of producing the fifth unit?
A)$4
B)$6
C)$8
D)$2
E)$10

Question

The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1
 
-Refer to Table 8.1. What is the marginal cost of producing the fifth unit?
A)$4 
B)$6 
C)$8 
D)$2 
E)$10

Quizplus · Accepted Answer

Marginal cost is the change in total cost that arises when the quantity produced is incremented by one. In this case, the total cost of producing 5 units is $30 while the total cost of producing 4 units is $24. Therefore, the marginal cost of producing the fifth unit is $6 ($30 - $24 = $6). Thus, the correct answer is B.

The Following Table Shows the Cost of Producing Different Units