Refer to the following:
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit.

$$\begin{array} { c c }
&\text { Average } \
\text { Output } & \text { Variable Cost }\
\hline 10 & \$ 40 \
20 & 30 \
30 & 45 \
40 & 60 \
\hline
\end{array}$$
-How much does the 23rd unit of output add to the firm's total cost?
A) $75
B) $135
C) $750
D) $1,350
E) none of the above

Question

Refer to the following:
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit.

$$\begin{array} { c c } 
&\text { Average } \
\text { Output } & \text { Variable Cost }\
\hline 10 & \$ 40 \
20 & 30 \
30 & 45 \
40 & 60 \
\hline
\end{array}$$
-How much does the 23rd unit of output add to the firm's total cost?
A) $75
B) $135
C) $750
D) $1,350
E) none of the above

Quizplus · Accepted Answer

The average variable cost for 20 units is $30, and for 30 units is $45. The marginal cost for the 23rd unit is approximately $75, calculated by the change in total variable cost divided by the change in output.

Refer to the Following: the Capital Stock Is Fixed at 50

Refer to the Following:
the Capital Stock Is Fixed at 50