The following table shows the cost of producing different units of ball point pens by a firm. Table 21.1
Refer to Table 21.1.What is the marginal cost of producing the fourth and the fifth unit?

Question

The following table shows the cost of producing different units of ball point pens by a firm. Table 21.1
 Refer to Table 21.1.What is the marginal cost of producing the fourth and the fifth unit?

Quizplus · Accepted Answer

The marginal cost is the cost of producing one additional unit. To calculate the marginal cost, we find the difference between the total cost of producing n+1 units and the total cost of producing n units. 
The total cost of producing 3 pens is $12, and the total cost of producing 4 pens is $16. Therefore, the marginal cost of producing the fourth pen is $16 - $12 = $4. 
The total cost of producing 4 pens is $16, and the total cost of producing 5 pens is $22. Therefore, the marginal cost of producing the fifth pen is $22 - $16 = $6. 
Since the question asks for the marginal cost of producing both the fourth and the fifth unit, the answer is B.

The Following Table Shows the Cost of Producing Different Units