What is the marginal cost of the second automobile?
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A company that produces luxury automobiles has the following simplified costs. What is the marginal cost of the second automobile?
# of Automobiles.....Fixed Cost..........Total Variable Costs
0.......................$50,000............$0
1.......................$50,000............$10,000
2.......................$50,000............$20,000
3.......................$50,000............$40,000
a. $20,000.
b. $10,000.
c. $70,000.
d. $30,000.
Thinking it is B. Since between one and two the marginal cost is $10,000.
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