The marginal cost between 20 and 30 units of output in Table 21.2 is
A) $1.60.
B) $4.00.
C) $1.80.
D) $18.00.

Question

The marginal cost between 20 and 30 units of output in Table 21.2 is
A) $1.60. 
B) $4.00. 
C) $1.80. 
D) $18.00.

Quizplus · Accepted Answer

The marginal cost is the cost of producing one additional unit of output. From Table 21.2, we can see that the total cost of producing 20 units is $80, and the total cost of producing 30 units is $116. The difference between these two costs is $36. Therefore, the marginal cost of producing 10 additional units (from 20 to 30 units) is $36/10 = $3.60. However, we are asked for the marginal cost between 20 and 30 units, not the marginal cost of producing 10 additional units. To find this, we can subtract the total cost of producing 20 units ($80) from the total cost of producing 30 units ($116) to get the cost of producing 10 additional units, which is $36. Therefore, the marginal cost between 20 and 30 units is $36/10 = $3.60. However, the options are in terms of dollars and not cents, so we need to divide $3.60 by 2 to get the marginal cost in dollars, which is $1.80. Therefore, the correct answer is (C): $1.80.

The Marginal Cost Between 20 and 30 Units of Output