Answered

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Use the table below to answer the following question.

\begin{tabular}{|c|c|c|}
\hline
Units of Output & Total Fixed Cost (dollars) & Total Variable Cost (dollars) \\
\hline
1 & 60 & 40 \\
\hline
2 & 60 & 90 \\
\hline
3 & 60 & 120 \\
\hline
4 & 60 & 180 \\
\hline
\end{tabular}

What is the Marginal Cost (MC) of producing the third unit of output?

A. \[tex]$20

B. \$[/tex]30

C. \[tex]$40

D. \$[/tex]180

E. It's impossible to tell from the data.

Sagot :

GinnyAnsweridn
To determine the Marginal Cost (MC) of producing the third unit of output, we need to look at the change in the Total Variable Cost (TVC) as we move from producing the second unit to producing the third unit. The formula for Marginal Cost is as follows:

[tex]\[ MC = TVC_{n} - TVC_{n-1} \][/tex]

Here,
- [tex]\( TVC_{n} \)[/tex] is the Total Variable Cost at the current output level.
- [tex]\( TVC_{n-1} \)[/tex] is the Total Variable Cost at the previous output level.

Given the data:
- The Total Variable Cost (TVC) for 2 units is \[tex]$90. - The Total Variable Cost (TVC) for 3 units is \$[/tex]120.

Calculate the Marginal Cost (MC) of producing the third unit:

[tex]\[ MC = TVC_{3} - TVC_{2} \][/tex]
[tex]\[ MC = 120 - 90 \][/tex]
[tex]\[ MC = 30 \][/tex]

Therefore, the Marginal Cost (MC) of producing the third unit of output is \[tex]$30. So, the correct answer is: \$[/tex]30
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