A company could produce 99 units of a good for $316 or produce 100 units of the same good for $320. The marginal cost of the 100th unit
A) is $3.20.
B) is $4.00.
C) is $320.
D) cannot be calculated with this information.

Question

Quizplus · Accepted Answer

The marginal cost is the additional cost of producing one more unit. Here, the cost of producing 100 units is $320, and the cost of producing 99 units is $316. Therefore, the marginal cost of the 100th unit is $320 - $316 = $4.00.

A Company Could Produce 99 Units of a Good for $316