The table below shows how total cost varies with output in a factory producing watches. Based on the table, the marginal cost of producing the third watch equals _____.Table 6-5

Question

Quizplus · Accepted Answer

Marginal cost refers to the additional cost incurred on producing one additional unit of output. To find marginal cost, we need to look at the change in total cost as we increase output by one unit. In this case, we see that increasing output from 2 to 3 units results in an increase in total cost from $130 to $134. Therefore, the marginal cost of producing the third watch is $4. So, the correct answer is D.

The Table Below Shows How Total Cost Varies with Output