Use the table to answer the question.

Question

Number of Workers Output (thousands) Fixed Cost ($) Variable Cost ($)
10 3 2000 100
20 5 2000 200
30 6 2000 300
What is the marginal cost of increasing production from 5,000 units to 6,000 units?

(1 point)
Responses

$0.43
0.43 dollars

$0.10
0.10 dollars

$300
300 dollars

$100

Answer 1

To calculate the marginal cost of increasing production from 5,000 units to 6,000 units, we need to determine the change in total cost associated with that increase in output.

1. Find the total cost at 5,000 units:

   • For 5,000 units, we look at the output of 5,000 which corresponds to 20 workers.
   • Total cost = Fixed Cost + Variable Cost
   • Fixed Cost: $2000
   • Variable Cost: $200 (for 20 workers)
   • Total Cost at 5,000 units = $2000 + $200 = $2200

2. Find the total cost at 6,000 units:

   • For 6,000 units, we look at the output of 6,000 which corresponds to 30 workers.
   • Total Cost at 6,000 units = Fixed Cost + Variable Cost
   • Fixed Cost: $2000
   • Variable Cost: $300 (for 30 workers)
   • Total Cost at 6,000 units = $2000 + $300 = $2300

3. Calculate the change in total cost:

   • Change in Total Cost = Total Cost at 6,000 units - Total Cost at 5,000 units
   • Change in Total Cost = $2300 - $2200 = $100

4. Calculate the change in output:

   • Change in output = 6,000 units - 5,000 units = 1,000 units

5. Calculate the marginal cost:

   • Marginal Cost = Change in Total Cost / Change in Output
   • Marginal Cost = $100 / 1,000 units = $0.10/ unit

Thus, the marginal cost of increasing production from 5,000 units to 6,000 units is $0.10 (or 0.10 dollars).

The response is:

$0.10 (0.10 dollars)