Use the following to answer questions:
-(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the marginal cost of the fifth cake?
A) $2
B) $10
C) $12
D) $20

Question

Use the following to answer questions: 
-(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the marginal cost of the fifth cake?
A) $2 
B) $10 
C) $12 
D) $20

Quizplus · Accepted Answer

The marginal cost is the change in total cost when one more unit is produced. If the fixed cost is $10, the total cost for the first four cakes and the fifth cake must be compared to find the change. The marginal cost of the fifth cake is the difference in total cost between producing four cakes and five cakes.

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