Question

Using this table, calculate the marginal cost of each of these quantities of bikes.

The first bike:
The fourth bike:
The sixth bike:
The seventh bike:

Bikes produce per day Total Cost Marginal Cost
1 $80
2 $97
3 $110
4 $130
5 $1660

Answer 1

The marginal cost is calculated by taking the change in total cost and dividing by the change in quantity. Without sufficient data, we can only calculate the marginal cost for the fourth bike, which is $20. We cannot calculate the marginal costs for the first, sixth, and seventh bikes because the necessary total cost data for the preceding units are not provided.

Step-by-step explanation:

The question involves calculating the marginal cost for different quantities of bikes produced, using a given total cost table. The marginal cost is defined as the additional cost of producing one more unit of output, and it is calculated by dividing the change in total cost by the change in quantity produced.

To find the marginal cost for the first bike, we only have the total cost for one bike, which is $80, and thus cannot calculate the marginal cost in this context as there is no previous data point to compare it to.

For the fourth bike, the total cost of producing 3 bikes is $110, and for 4 bikes is $130. The marginal cost is the change in total cost, which is $130 - $110 = $20, divided by the change in quantity, which is 1 bike. Therefore, the marginal cost for the fourth bike is $20.

For the sixth bike, the marginal cost would be calculated using total costs for five and six bikes, but that data is not provided in the question.

For the seventh bike, similarly, the marginal cost calculation would require data that is not provided in the question.