I just wanted to find out the formula for calculating the marginal cost of production Good X. How did they get those values? a formula would he highly appreciated!!!
Hi The marginal cost is the addition to total cost as a result of producing an additional unit of output. Given the information in this question we could calculate marginal cost, for each row in the table, as the change in total cost divided by the change in quantity. As we work down the rows in the table, we can see the number of workers increases by one. We are told that workers are paid £120 per week, so the change in total cost is £120 in each case. In part (i)(a) we calculated marginal product of labour. This is the change in the quantity of output (for an additional unit of labour). So in each row, we can calculate marginal cost as £120/marginal product of labour. I hope that helps Gresham
