economic question

Question

If total cost increases from $50 to $90 as output increases from 20 to 25 units, what is the marginal cost of the twenty fifth unit of output?

Answer 1

MC=(ΔTC) / (ΔQ)

 

ΔTC = (90-50)

       = 40

 

 

ΔQ = (25-20)

      =5

 

 

40/5= 8

 

Marginal Cost of 25th unit is $8