Question

Use the table to answer the 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

$300
300 dollars

$0.43
0.43 dollars

$100
100 dollars

$0.10
0.10 dollars

Answer 1

To calculate the marginal cost of increasing production from 5,000 units to 6,000 units, we need to find the increase in total cost and the increase in output.

1. **Determine the total cost at each level of output.**
- Total Cost = Fixed Cost + Variable Cost

For 5,000 units (which corresponds to 20 workers and an output of 5,000):
- Fixed Cost = $2000
- Variable Cost = $200
- Total Cost = $2000 + $200 = $2200

For 6,000 units (which corresponds to 30 workers and an output of 6,000):
- Fixed Cost = $2000
- Variable Cost = $300
- Total Cost = $2000 + $300 = $2300

2. **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

3. **Determine the change in output:**
- Change in Output = 6,000 units - 5,000 units = 1,000 units

4. **Calculate the marginal cost:**
- Marginal Cost = Change in Total Cost / Change in Output
- Marginal Cost = $100 / 1,000 units = $0.10

Therefore, the marginal cost of increasing production from 5,000 units to 6,000 units is **$0.10**.