If it costs the Delicious Donuts firm $400 to produce 2000 donuts, and $410.20 to produce 2001 donuts, the marginal cost of the last donut produced is:
A) $10.20
B) $0.80
C) $5.00
D) $0.50

Question

Quizplus · Accepted Answer

Marginal cost is the change in total cost divided by the change in quantity. In this case, the change in total cost is $410.20 - $400 = $10.20, and the change in quantity is 2001 - 2000 = 1. Therefore, the marginal cost of the last donut produced is $10.20.

If It Costs the Delicious Donuts Firm $400 to Produce