If a firm's production department data say that the AVC for producing 8 units
and 10 units of output is $300 and 320 respectively, MC of 10th unit will be
(a) 400
(b) 500
(c) 300
(d) 250
Answers
Given : a firm's production department data says that TVC for producing 8 units and 10 units of output is 2500 and 3000 respectively,
To Find : MC (marginal cost) of 10th unit will be:
(a) 400
(b) 500
(c) 300
(d) 250
Solution:
TVC = Total Variable cost
TVC for producing 8 units = 2500
TVC for producing 10 units = 3000
=> TVC for producing 10-8 units = 3000 - 2500
=> TVC for producing 2 units = 500
=> TVC for producing 1 units = 500/2
=> TVC for producing 1 units = 250
Variable cost of one additional unit of production is called marginal
cost = 250
marginal cost is per unit variable cost. = 250
Hence marginal cost of 10th unit will be: 250
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Given :
a firm's production department data says that TVC for producing 8 units and 10 units of output is 2500 and 3000 respectively,
To Find :
MC (marginal cost) of 10th unit will be:
(a) 400
(b) 500
(c) 300
(d) 250
Solution:
TVC = Total Variable cost
TVC for producing 8 units = 2500
TVC for producing 10 units = 3000
=> TVC for producing 10-8 units = 3000 - 2500
=> TVC for producing 2 units = 500
=> TVC for producing 1 units = 500/2
=> TVC for producing 1 units = 250
Variable cost of one additional unit of production is called marginal
cost = 250
marginal cost is per unit variable cost. = 250
Hence marginal cost of 10th unit will be: 250
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