Q3 ### Figure 7-1 ExplanationThe graph presented in Figure 7-1 illustrates the relationship between total cost and output quantity. The axes are labeled with cost and output:- **Y-axis (Vertical)**: Represents cost in dollars, marked at intervals of $25, $33, $35, $43, and $49.- **X-axis (Horizontal)**: Represents quantity of output, ranging from 0 to 3 units.There are two curves plotted on the graph:1. **IC (Total Cost Curve)**: This curve shows the increasing cost as output quantity (Q) rises.2. **FC (Fixed Cost Line)**: This is a horizontal line drawn at $33, indicating the fixed cost that remains constant regardless of output.**Reference:** Ref 7-1**Question:**Given the curves shown in Figure 7-1, the marginal cost of the 3rd unit of output is:- A. $6.00- B. $10.00- C. $16.00- D. $25.00- E. none of the above.The marginal cost is determined by the change in total cost when one additional unit of output is produced. In this graph, marginal cost is calculated by looking at the increase in total cost from producing one more unit, specifically from the 2nd to the 3rd unit of output.

Marginal cost refers to an additional cost of producing one more unit of output. It measures the…

Figure 7-1 $49 $43 $35 $25 FC 12 Reference: Ref 7-1 Given the curves shown in Figure 7-1, the marginal cost of the 3rd unit of output is: OA $6.00. B. $10.00. OCS16.00. D.$25.00. E. none of the above.

Figure 7-1 $49 $43 $35 $25 FC 12 Reference: Ref 7-1 Given the curves shown in Figure 7-1, the marginal cost of the 3rd unit of output is: OA $6.00. B. $10.00. OCS16.00. D.$25.00. E. none of the above.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q19
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