To determine the Marginal Cost (MC) of producing the third unit of output, we need to look at the change in the Total Variable Cost (TVC) as we move from producing the second unit to producing the third unit. The formula for Marginal Cost is as follows:
[tex]\[ MC = TVC_{n} - TVC_{n-1} \][/tex]
Here,
- [tex]\( TVC_{n} \)[/tex] is the Total Variable Cost at the current output level.
- [tex]\( TVC_{n-1} \)[/tex] is the Total Variable Cost at the previous output level.
Given the data:
- The Total Variable Cost (TVC) for 2 units is \[tex]$90.
- The Total Variable Cost (TVC) for 3 units is \$[/tex]120.
Calculate the Marginal Cost (MC) of producing the third unit:
[tex]\[ MC = TVC_{3} - TVC_{2} \][/tex]
[tex]\[ MC = 120 - 90 \][/tex]
[tex]\[ MC = 30 \][/tex]
Therefore, the Marginal Cost (MC) of producing the third unit of output is \[tex]$30.
So, the correct answer is:
\$[/tex]30
