A firm's total fixed cost is $100.If total cost is $200 for one unit of output and $310 for two units,what is the marginal cost of the second unit?
A)$100
B)$110
C)$200
D)$210
E)$310

Question

Quizplus · Accepted Answer

The total fixed cost is $100, therefore the variable cost for one unit of output is:
$200 - $100 = $100
The variable cost for two units of output is:
$310 - $100 = $210
To find the marginal cost of the second unit, we need to find the difference between the total cost of two units and the total cost of one unit:
Marginal cost of second unit = Total cost of two units - Total cost of one unit
Marginal cost of second unit = ($310) - ($200)
Marginal cost of second unit = $110

A Firm's Total Fixed Cost Is $100