If a firm spends $200 to produce 20 units of output and spends $440 to produce 40 units of output,then the marginal cost of this increase in output is

Question

Quizplus · Accepted Answer

The marginal cost is calculated by the change in total cost divided by the change in quantity. Here, the change in total cost is $440 - $200 = $240, and the change in quantity is 40 - 20 = 20 units. Therefore, the marginal cost is $240 / 20 = $12.

If a Firm Spends $200 to Produce 20 Units of Output