$$\begin{array} { c c c c c c c }
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 1,marginal cost is
A)0.
B)$200.
C)$300.
D)$400.

Question

$$\begin{array} { c c c c c c c } 
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 1,marginal cost is
A)0.
B)$200.
C)$300.
D)$400.

Quizplus · Accepted Answer

Marginal cost is the change in total cost when one additional unit is produced. For the first unit, the total variable cost is $400. Since the fixed cost is $1000, the total cost for producing one unit is $1400 ($400 variable cost + $1000 fixed cost). Therefore, the marginal cost for the first unit is the change from $0 to $1400, which is $400.

Use the Above Table and Assume a Fixed Cost of