The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.

-Refer to the information above to answer this question.What is the value of MC if 5 units of labour are used?

Question

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 
-Refer to the information above to answer this question.What is the value of MC if 5 units of labour are used?

Quizplus · Accepted Answer

To calculate the Marginal Cost (MC), we need to find the change in the Total Cost (TC) when one additional unit of labour is employed. 
From the table, we can see that if 4 units of labour are used, TC = $68, and if 5 units of labour are used, TC = $72. 
Therefore, MC = (TC with 5 units of labour - TC with 4 units of labour) / (5 - 4) = ($72 - $68) / 1 = $4. 
Hence, the correct answer is C.

The Data in the Table Is for a Firm in Which