The marginal cost of a manufacturer is given as for the production of q units. The total cost of producing the first 4 units is GHS 800. Find the total cost of producing 8 units.

Answer 1

if TC(Q) = 200Q

and MC =TC' = 200

TC(4) = 800

and

TC(8) =200(8) = 1600

Ghanian cedi exchange rate is about 1 to 10 US cents

$1.00 = 10 cedis

1600 = about $160

MC = about $20

a constant Marginial Cost suggests a competitive firm, a smaller manufacturer relative to the market size. No monopsony power.