The table given below shows the average total cost of production of a firm at different levels of the output. Table 21.5
In Table 21.5, the marginal cost of producing the third unit of output is:

Question

The table given below shows the average total cost of production of a firm at different levels of the output. Table 21.5
 In Table 21.5, the marginal cost of producing the third unit of output is:

Quizplus · Accepted Answer

To find the marginal cost of producing the third unit of output, we need to look at the change in total cost when output increases from 2 to 3 units.

Total cost for 2 units of output = $20 
Total cost for 3 units of output = $25

So the marginal cost of producing the third unit of output is:

Marginal cost = Change in total cost / Change in output 
Marginal cost = ($25 - $20) / (3 - 2) 
Marginal cost = $5

Therefore, the correct answer is C) $5.

The Table Given Below Shows the Average Total Cost of Production