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11 November, 11:13

When a firm produces one unit, the variable cost is $3. When the firm produces two units, the variable cost is $6. What is the marginal cost associated with two units of production? A) $0.5 B) $2 C) $6 D) $3

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  1. 11 November, 11:19
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    Option (D) is correct.

    Explanation:

    Given that,

    Variable cost of one unit = $3

    Variable cost of two units = $6

    Marginal cost refers to the cost of producing an additional unit of an output and it is added to the total cost of production.

    Therefore,

    Marginal cost:

    = Variable cost of two units - Variable cost of one unit

    = $6 - $3

    = $3

    Hence, the marginal cost associated with two units of production is $3.
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