Given the total cost schedule below, for which unit is the marginal cost the lowest?
$$\begin{array} { | l | l | l | l | l | l | l | l | }
\hline \text { Output } & 0 & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Total Cost } & 20 & 30 & 35 & 36 & 40 & 48 & 63 \
\hline
\end{array}$$
A) 2nd
B) 3rd
C) 4th
D) 5th

Question

Given the total cost schedule below, for which unit is the marginal cost the lowest?
$$\begin{array} { | l | l | l | l | l | l | l | l | } 
\hline \text { Output } & 0 & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Total Cost } & 20 & 30 & 35 & 36 & 40 & 48 & 63 \
\hline
\end{array}$$
A) 2nd
B) 3rd
C) 4th
D) 5th

Quizplus · Accepted Answer

Marginal cost is the change in total cost when one more unit is produced. Calculating the marginal cost for each unit: - 1st unit: $30 - $20 = $10 - 2nd unit: $35 - $30 = $5 - 3rd unit: $36 - $35 = $1 (lowest marginal cost) - 4th unit: $40 - $36 = $4 - 5th unit: $48 - $40 = $8 - 6th unit: $63 - $48 = $15 The 3rd unit has the lowest marginal cost of $1.

Given the Total Cost Schedule Below, for Which Unit Is