Question

When a firm produces another unit of output the total benefit increases from $1,000 to $1,100 and the total cost rises from $700 to $780. The marginal benefit of producing this unit is $  and the marginal cost of producing this unit is $  . Enter whole numbers.

Answer 1

Q          TB        TC

1          1000     700

2          1100     780

MB       100      

MC       80

So MB= (1100-1000)/(2-1) = 100

MC = (780-700)/(2-1) = 80