If total cost is $1,000 when output is zero, and total cost is $1,200 when output is one, and total cost is $1,500 when output is two, then which of the following is true ?
A) Total fixed cost is $1,500.
B) The marginal cost of producing the first unit of output is $1,200.
C) The marginal cost of producing the second unit of output is $300.
D) The average fixed cost is $750 when two units of output are produced.

Question

Quizplus · Accepted Answer

The marginal cost of producing the second unit is the change in total cost when output increases from one to two, which is $1,500 - $1,200 = $300.

If Total Cost Is $1,000 When Output Is Zero, and Total