JAMB - Economics (1984 - No. 41)
The table above shows the short-run costs of a firm. What is the firm's marginal cost for the third item produced?
N350.00
N340.00
360.00
370.00
55.00
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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