A firm has a fixed cost of $2,000,and at an output of one,variable cost is $1,500.How much is marginal cost at an output of 1?

A) $1,000
B) $1,500
C) $2,000
D) $3,500
E) There is insufficient information to find marginal cost at an output of 1.

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Kylien Clark · Accepted Answer

Final Answer : B, Explanation :  At an output of 1, the total cost is the sum of fixed cost and variable cost which is $2,000 + $1,500 = $3,500.Marginal cost is the increase in cost when one additional unit is produced. Mathematically, marginal cost = change in total cost / change in output.Since output is currently at 1, any increase in output will result in a change of 1. Therefore, the marginal cost at an output of 1 can be calculated as follows:Marginal cost = (total cost at 2 units - total cost at 1 unit) / (2-1)Marginal cost = ($2,000 + $3,000 - $3,500) / 1Marginal cost = $2,500 / 1Marginal cost = $2,500However, this question only asks for the marginal cost at an output of 1, which is the variable cost at that output. Therefore, the best choice is B: $1,500.

A firm has a fixed cost of $2,000,and at an output of one,variable cost is $1,500.How much is marginal cost at an output of 1?

A) $1,000
B) $1,500
C) $2,000
D) $3,500
E) There is insufficient information to find marginal cost at an output of 1.

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A firm has a fixed cost of $2,000,and at an output of one,variable cost is $1,500.How much is marginal cost at an output of 1?A) $1,000B) $1,500C) $2,000D) $3,500E) There is insufficient information to find marginal cost at an output of 1.

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Learning Objectives

Learning Objectives

Related questions

A firm has a fixed cost of $2,000,and at an output of one,variable cost is $1,500.How much is marginal cost at an output of 1?

A) $1,000
B) $1,500
C) $2,000
D) $3,500
E) There is insufficient information to find marginal cost at an output of 1.