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The table above shows the short-run costs of a firm. What is the firm's marginal...

Economics
JAMB 1984

The table above shows the short-run costs of a firm. What is the firm's marginal cost for the third item produced?

  • A. N350.00
  • B. N340.00
  • C. 360.00
  • D. 370.00
  • E. 55.00
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Correct Answer: Option B
Explanation

To find the marginal cost of the third item produced, we can use the following formula:

Marginal Cost (MC) = Total Cost at Q\(_3\) −Total Cost at Q\(_2\)

Given data from the table:

Total Cost at Quantity 2 (2TC\(_2\)​) = 1310 N

Total Cost at Quantity 3 (3TC\(_3\)​) = 1650 N

MC = TC\(_3​\) − TC\(_2\) ​= 1650N − 1310N = 340N


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