When output expands from the fourth to the fifth unit,the total variable cost of production rises from $400 to $500,while the total fixed cost remains constant at $100.Compute the marginal cost of producing the fifth unit.
A)$50
B)$200
C)$400
D)$100

Question

Quizplus · Accepted Answer

Marginal cost is the change in total cost (which includes both variable and fixed costs) when output is increased by one unit. Here, the total variable cost increases by $100 ($500 - $400) from the fourth to the fifth unit, and since the total fixed cost remains constant, the total cost increase is also $100. Therefore, the marginal cost of producing the fifth unit is $100.

When Output Expands from the Fourth to the Fifth Unit,the