**Output Table: Costs and Calculations**| Output (Q) | Total Fixed Cost | Total Variable Cost | Total Cost | Marginal Cost | Average Variable Cost | Average Fixed Cost | Average Total Cost ||------------|------------------|---------------------|------------|---------------|-----------------------|--------------------|--------------------|| 0 | ------- | $0 | $500 | $200 | --- | --- | --- || 1 | --- | $200 | --- | --- | $200 | --- | $700 || 2 | $500 | $300 | $800 | $200 | --- | $250 | --- || 3 | $500 | --- | $1,000 | --- | $167 | --- | $333 || 4 | $500 | $800 | --- | --- | $200 | $125 | --- |**Question:**For the cost data shown above, what is this firm's Marginal Cost (MC) when Output increases from 3 to 4?- [ ] $200- [ ] $350- [ ] $500- [ ] $300**Explanation:**To find the Marginal Cost (MC) when output increases from 3 to 4, one must calculate the additional cost incurred as a result of producing one more unit of output.Given:- Total Cost at Q=3: $1,000- Total Cost at Q=4 can be deduced from the difference in Total Cost and Total Variable Cost at Q=4. However, Total Cost is missing. Thus, proper calculation is required to establish the missing Total Cost at Q=4, and therefore, the MC can be determined by understanding the relationship and applying given cost components or assumptions based on the trend of variable costs.**Solution Approach:**1. Assume the missing values, reasonable deductions can be: - Total Variable Cost at Q=3 and relevant changes to reach $800 at Q=4. - Total Cost can then be approximated or explicitly calculated further if variable cost trends are given or interpretable. Analyze choices closely based on given understanding or class instructions for costs.

Answered: Output Total Variable Marginal Variable…

Output Total Variable Marginal Variable Fixed Total (Q) Fixed Cost Cost Total Cost Cost Cost Cost Cost $0 $500 $200 1 $200 $200 $700 2 $500 $300 $800 $250 $200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**Output Table: Costs and Calculations**

| Output (Q) | Total Fixed Cost | Total Variable Cost | Total Cost | Marginal Cost | Average Variable Cost | Average Fixed Cost | Average Total Cost |
|------------|------------------|---------------------|------------|---------------|-----------------------|--------------------|--------------------|
| 0 | ------- | $0 | $500 | $200 | --- | --- | --- |
| 1 | --- | $200 | --- | --- | $200 | --- | $700 |
| 2 | $500 | $300 | $800 | $200 | --- | $250 | --- |
| 3 | $500 | --- | $1,000 | --- | $167 | --- | $333 |
| 4 | $500 | $800 | --- | --- | $200 | $125 | --- |

**Question:**

For the cost data shown above, what is this firm's Marginal Cost (MC) when Output increases from 3 to 4?

- [ ] $200
- [ ] $350
- [ ] $500
- [ ] $300

**Explanation:**

To find the Marginal Cost (MC) when output increases from 3 to 4, one must calculate the additional cost incurred as a result of producing one more unit of output.

Given:
- Total Cost at Q=3: $1,000
- Total Cost at Q=4 can be deduced from the difference in Total Cost and Total Variable Cost at Q=4. However, Total Cost is missing.

Thus, proper calculation is required to establish the missing Total Cost at Q=4, and therefore, the MC can be determined by understanding the relationship and applying given cost components or assumptions based on the trend of variable costs.

**Solution Approach:**

1. Assume the missing values, reasonable deductions can be:
- Total Variable Cost at Q=3 and relevant changes to reach $800 at Q=4.
- Total Cost can then be approximated or explicitly calculated further if variable cost trends are given or interpretable.

Analyze choices closely based on given understanding or class instructions for costs.

Expert Solution

Step 1

Marginal cost is the additional cost incurred with an additional unit of output produced.

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