Question

If the total cost of producing 4 units is $150 and the marginal cost of producing the fifth unit is $20, then the total cost of 5 units is ____.

Answer 1

Answer:

$170

Explanation:

Marginal cost is defined as the cost of adding an additional cost of a product or service.

Total cost is the sum total of the cost of all the product and/or service.

Cost of producing 4 units = $150

Cost of producing the 5th unit = $20

The cost of producing one unit = $150/4

= $37.5

Total cost of producing 5 units =

Cost of producing 4 units + cost of the 5th unit

= $150 + $20

= $170

Cost of producing the 5 units = $170