Answer to Question #164819 in Economics of Enterprise for nj

Question

The local farmer's market offers one-kilogram asparagus for 28 €, two kilograms for 1,7 x 28 € and three kilograms for 1,9 x 281 €. What is the marginal cost of the second kilogram? What is the marginal cost of the third kilogram?

Answer 1

Marginal cost represents the incremental costs incurred when producing additional units of a good or service. It is calculated by taking the total change in the cost of producing more goods and dividing that by the change in the number of goods produced.

$marginal\ cost \ =\frac{change \ in \ total\ cost}{change \ in \ quantity }$

cost of production at:

1 kilogram= $28$

2 kilogram=$[1.7 \times 28]=47.6$

3 kilogram=[$1.9\times 28]=53.2$

$marginal \ cost =\frac{change \ in \ total\ cost}{ change\ in\ quantity}$

at :

$2kgs =\frac{47.6-28}{2-1}=\frac{19.6}{1}=19.6\\ 3kgs=\frac{53.2-47.6}{3-2}=\frac{5,6}{1}=5.6$