Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units.Which of the following are true?
A)FC = $100
B)MC = $300
C)MC = $30
D)FC = $400

Question

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units.Which of the following are true?​
A)​FC = $100
B)MC = $300
C)MC = $30
D)​FC = $400

Quizplus · Accepted Answer

To find out the marginal cost (MC) per unit, we need to calculate the change in total cost when the output is increased by one unit.

MC = (Change in Total Cost) / (Change in Output)

In this case, when the output is increased from 40 to 50 units, the change in total cost is $300 ($1,800 - $1,500).

So, MC = $300 / 10 units = $30 per unit

Hence, option C is true. We cannot confirm anything about fixed costs (FC) as there is no information provided about them in the question.

Total Costs Increase from $1,500 to $1,800 When a Firm