Question

The total cost to produce 100 widgets on Monday was $100. On Tuesday, 105 widgets were produced costing a total of $105. What is the marginal cost in dollars of producing widgets?

Answer 1

Answer:

Marginal cost = $1

Explanation:

Monday:

100 widgets cost $100

Tuesday :

105 widgets cost $105

Marginal cost (MC) of production is the change in the total cost of a product that arises from producing one additional unit of that product.

The marginal cost (MC) is calculated by dividing the change in the total cost (C) by the change in quantity (Q).

Marginal cost = Change in Total cost / change in Quantity

= (105 - 100) / (105 - 100)

= 5 / 5

= 1

Marginal cost= $1

Answer 2

Answer:

The marginal cost in dollars of producing widgets is $1

Explanation:

If the total cost (TC) of producing 100 widget on Monday is $100 and the total cost of producing 105 widget on Tuesday is $105, the marginal cost (MC) of producing the widgets is

Marginal cost widgets = Change in TC / Change in Widget produced

MC = $105 - $100 / 105 - 100

MC = $5/5

MC = $1