Marginal cost?

Question

average total cost operating clinic $400/per case, if vol 100 cases, & 450/per case, if vol is 110 case.What is total cost at each 2 volumes? what is marginal cost of another case within this range.

Answer 1

TC(100)=AVC(100)*100 = $400*100= $40'000

TC(110)=AVC(110)*110 = $450*110= $49'500

Added cost by last 10 cases (from 101-th to 110-th including) = $49'500 - $40'000 = +$9'500

Average(!) marginal cost by each(!) of last 10 cases (from 101-th to 110-th including) = $9'500 / 10 = $950

But be carefull, for general microeconomics tasks marginal cost of 110-th case may be higher than $950 and marginal cost of 101-th case may be lowed than $950.

So marginal cost of each case within given range ( 101 ≤ Q ≤ 110 ) is only average (!) and not necessarely the same for each of a cases within range (usually MC is rising).

Answer 2

If volume is 100, average total cost is $400. So, the total cost is $400*100= $40,000.

Similarly, the tptal cost for 110 cases is $450*110= $49,500

So, the increase in total cost for the range 101 to 110 cases is $49,500 - $40,000= $950.

So the marginal cost for another case within the volume range of 10 from 101th case to 110th case is $950/10= $95.