A firm's total variable cost increases from $4,000 to $4,020 as the firm increases its output from 400 to 401 units. What is the marginal cost of producing the 401st unit?
A) $10
B) $4,000
C) $20
D) $4,020

Question

Quizplus · Accepted Answer

The marginal cost is the change in total variable cost divided by the change in quantity. Here, it is ($4,020 - $4,000) / (401 - 400) = $20.

A Firm's Total Variable Cost Increases from $4,000 to $4,020