Question

What does the marginal cost of the fifth unit of output equal?

A) The total cost of five units
B) The total cost of four units
C) The difference between the total cost of five units and four units
D) The average cost of five units

Answer 1

The marginal cost of the fifth unit of output equals the difference between the total cost of five units and four units, which in this case is $5.

Step-by-step explanation:

The marginal cost of the fifth unit of output equals the difference between the total cost of five units and four units. In this case, the total cost of five units is $130 and the total cost of four units is $125. Therefore, the marginal cost of the fifth unit is $130 - $125 = $5.