Question

If the production of 3 items results in a Total Cost of $50, and the Marginal Cost of producing 4 items is $8, what would the Total Cost be of producing 4 items?

Answer 1

The total cost of producing 4 items is $58, calculated by adding the marginal cost of the 4th item ($8) to the total cost of producing 3 items ($50).

Step-by-step explanation:

The student has asked about calculating the total cost of producing an additional item given its marginal cost and the total cost for a prior production level. Marginal cost is the cost of producing one additional unit. If the production of 3 items results in a total cost of $50, and the marginal cost of producing the 4th item is $8, then to find the total cost of producing 4 items, one must add the marginal cost of the 4th item to the previous total cost.

To calculate it:

• Total cost for 3 items = $50
• Marginal cost of 4th item = $8
• Total cost for 4 items = Total cost for 3 items + Marginal cost of 4th item
• Total cost for 4 items = $50 + $8 = $58