If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is
A)$10.
B)$20.
C)$22.
D)$25.
E)dependent upon the amount of extra labour used.

Question

Quizplus · Accepted Answer

The marginal cost is calculated by the change in total cost divided by the change in quantity. Here, the total cost increases by $100 ($200 - $100) for an increase of 5 teapots (10 - 5). Thus, the marginal cost per teapot is $100 / 5 = $20.

If an Increase in Output from 5 to 10 Teapots