Question

If the cost made by the company rises from Rs5000 to Rs7000 because of increase in level of level of output from 7 unit to 8 unit then find out the marginal cost faced by the company​

Answer 1

Answer: Rs2000

Step-by-step explanation:

To find the marginal cost, we use the formula:

Marginal Cost (MC) = Change in Total Cost / Change in Quantity

First, let's calculate the change in total cost:

Change in Total Cost = Final Total Cost - Initial Total Cost

Final Total Cost = Rs7000

Initial Total Cost = Rs5000

Change in Total Cost = Rs7000 - Rs5000

Change in Total Cost = Rs2000

Now, let's calculate the change in quantity:

Change in Quantity = Final Quantity - Initial Quantity

Final Quantity = 8 units

Initial Quantity = 7 units

Change in Quantity = 8 units - 7 units

Change in Quantity = 1 unit

Now, let's calculate the marginal cost:

Marginal Cost (MC) = Change in Total Cost / Change in Quantity

Marginal Cost (MC) = Rs2000 / 1 unit

Marginal Cost (MC) = Rs2000

So, the marginal cost faced by the company is Rs2000.