Question

Suppose that the firm you manage faces the following costs:

Quantity Total Cost
0 $3
1 $5
2 $7
3 $10
4 $15
What is the variable cost of the 3rd unit produced?
a. $10
b. $5
c. $7
d. $3
e. $0

Answer 1

d. $3

Step-by-step explanation:

Quantity Total Cost Fixed cost Total var. marginal cost

0 $3 $3 0 0

1 $5 $3 $2 $2

2 $7 $3 $4 $2

3 $10 $3 $7 $3

4 $15 $3 $12 $5

the variable cost of the third unit is equal to the marginal cost of producing it.