This month a company's cost to manufacture 50 floopers was 8000 dollars.

Their marginal cost for the same number of floopers was 700 dollars.

Use the above information to estimate their cost to produce 53 floopers.

Cost is approximately ??

Question

This month a company's cost to manufacture 50 floopers was 8000 dollars.

Their marginal cost for the same number of floopers was 700 dollars.

Use the above information to estimate their cost to produce 53 floopers.

Cost is approximately ??

anonymous · Answer

Total Cost = Fixed Cost + Marginal Cost

Where Fixed Cost = Cost not depending on unit produced (Like cost of setting up a factory)
Marginal Cost = Cost proportional to number of unit produced

Since for 50 units MC = $700 => for 1 unit MC = 700 / 50 = $14
For 53 Unit MC = 53 * 14 = $742
Again, Fixed Cost = 8000 - 700 = $7300

Hence Total Cost for 53 unit = 7300 + 742= $8042