Exhibit 21-8

-Exhibit 21-8 shows how output varies with the only variable input used in its production. If the cost of a unit of labor is $500, what is the approximate marginal cost of the 185th unit of output?
A)$2.50
B)$16.67
C)$12.50
D)$50.00
E)$100.00

Question

Exhibit 21-8
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-Exhibit 21-8 shows how output varies with the only variable input used in its production. If the cost of a unit of labor is $500, what is the approximate marginal cost of the 185th unit of output?
A)$2.50 
B)$16.67 
C)$12.50 
D)$50.00 
E)$100.00

Quizplus · Accepted Answer

The marginal cost of the 185th unit of output is the change in total cost divided by the change in output. The change in total cost is $500, and the change in output is 1 unit. Therefore, the marginal cost of the 185th unit of output is $500 / 1 = $500.

Exhibit 21-8 ​

Exhibit 21-8