Which statement is false? Marginal cost and marginal productivity are inversely related. Marginal cost is the change in a firm's total cost due to a one unit change in output. Costs that are small and unimportant with little impact on profits are called marginal costs. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost. Consider the table. Output 0 1 2 3 4 5 6 7 8 9 10 Total cost 100 110 115 125 140 160 190 230 280 340 420 What is the marginal cost of the fifth unit based on the table? $0 - $20 $20 $160

Question

Cornelius Knapp

Business

11 June, 14:23

Which statement is false? Marginal cost and marginal productivity are inversely related. Marginal cost is the change in a firm's total cost due to a one unit change in output. Costs that are small and unimportant with little impact on profits are called marginal costs. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost. Consider the table. Output 0 1 2 3 4 5 6 7 8 9 10 Total cost 100 110 115 125 140 160 190 230 280 340 420 What is the marginal cost of the fifth unit based on the table? $0 - $20 $20 $160

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Answers (1)

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Jimena Wu · Answer 1

Option (c) Marginal cost of fifth unit = $20

Explanation:

According to the scenario, computation of the given data are as follows:

1)

Option (b) : Marginal cost is the change in the total cost of firm due to one unit change in output.

We can calculate the marginal cost by using following formula:

Marginal cost = Total cost : Quantity

2)

Marginal cost of fifth unit = Total cost at unit 5 - total cost at unit 4

= $160 - $140

= $20