alleryA price-taking firm has total cost of ₹ 100 at zero output, ₹ 210 at 10 units, and ₹ 300 at 20 units. What is the marginal cost per unit over the range 10 to 20 units?
A₹ 9
B₹ 11
C₹ 90
D₹ 15
Answer & Solution
Correct answer: A. ₹ 9
1. Marginal cost is the change in total cost divided by the change in output.
2. TC rises from ₹ 210 to ₹ 300 as output rises from 10 to 20 units.
3. Change in TC = 300 - 210 = ₹ 90 for 10 extra units.
4. MC per unit = 90 / 10 = ₹ 9.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit III "Price-Output Determination under Different Market Forms", p.8_
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