The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1

-If the average total cost of producing 2 pounds of cheese is $4 and the average total cost of producing 3 pounds of cheese is $4.2, then the marginal cost of producing third pound of cheese is equal to:
A)$4.2.
B)$8.
C)$4.5.
D)$4.6.
E)$4.1.

Question

The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1
 
-If the average total cost of producing 2 pounds of cheese is $4 and the average total cost of producing 3 pounds of cheese is $4.2, then the marginal cost of producing third pound of cheese is equal to:
A)$4.2. 
B)$8. 
C)$4.5. 
D)$4.6. 
E)$4.1.

Quizplus · Accepted Answer

Marginal cost is the change in total cost divided by the change in quantity. In this case, the change in total cost is $4.2 - $4 = $0.2, and the change in quantity is 3 pounds - 2 pounds = 1 pound. Therefore, the marginal cost is $0.2 / 1 pound = $0.2 per pound.

The Following Table Shows the Cost of Producing Different Units