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

$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.