What is the marginal cost when output is 60?

Question

Use the cost table below to find the following marginal costs.

Output Quantity Total Variable Cost Total fixed cost Total cost

20	80	60	140
40	140	60	200
60	210	60	270
80	300	60	360
100	420	60	480
120	600	60	660
140	840	60	900

Answer 1

Output Quantity Total Variable Cost Marginal Cost Total cost

20	80	(80-0)/20 = 4	140
40	140	(140-80)/20 = 3	200
60	210	(210-140)/20 = 3.5	270
80	300	(300-210)/20 = 4.5	360
100	420	(420-300)/20 = 6	480
120	600	(600-420)/20 = 9	660
140	840	(840-600)/20 = 12	900

Because fixed costs are constant regardless of the level of the firm's output, they're not relevant to this question. To calculate the marginal cost, we need to use the average variable cost column and the output column. For each level of output, we do the following calculation:

MC = Δ Total Variable Cost / Δ Output Quantity → where Δ is the change from one table row to the next.

Thus, the marginal cost when output is set at 60 is 3.5.