Question

Quantity	Total costs	Total variable costs	Marginal costs	Average total costs	Average variable costs	Average fixed costs
1	$20
2			$6			$5
3		$21
4				$10.50		$2.50
5					$9

Given the table, what is the marginal cost of producing the fourth unit?

a. $20

b. $10

c. $5

d. $11

e. #31.50

Answer 1

Answer: d. $11

Quantity	Total costs ($)	Total variable costs ($)	Marginal costs ($)	Total fixed costs ($)	Average total costs ($)	Average variable costs ($)	Average fixed costs ($)
1	20		-	10
2	20+6 = 26	26-10=16	6	2*5=10			5
3	31	21	31-26=5	10
4	10.50*4 =42	42-10=32	42-31 = 11	10	10.50		2.50
5				10		9

Formulas used:

TC = TFC + TVC

MC = TC_n – TC_n-1

TC = ATC * Q

TFC = AFC * Q

TVC = TC – TFC