Scenario 7.1:
The average total cost to produce 100 cookies is $0.25 per cookie. The marginal cost is constant at $0.10 for all cookies produced.
-Refer to Scenario 7.1. Which piece of information would NOT be helpful in calculating the marginal cost of the 75th unit of output?
A) The total cost of 75 units
B) The total cost of 74 units
C) The variable cost of 75 units
D) The variable cost of 74 units
E) The firm's fixed cost

Question

Quizplus · Accepted Answer

The firm's fixed cost is not relevant in calculating marginal cost as it does not change with the level of output. Marginal cost only takes into account the change in variable costs when producing one additional unit of output. Therefore, options A, B, C, and D are all helpful in calculating the marginal cost of the 75th unit of output, but option E is not relevant.

Scenario 7.1: The Average Total Cost to Produce 100 Cookies Is $0.25