Given the table below which measures the cost for Very Brady Poster Factory
[tex]\begin{tabular}
{|c|c|c|c|}
\multicolumn{4}{|c|}{Measures of Cost for Very Brady Poster Factory}\\[1ex]Quantity of Posters&Variable cost&Total cost&Fixed cost\\[1ex]0&&&\$10\\1&\$1&&\\2&\$3&\$13&\\3&\$6&\$13&\\4&\$10&&\\5&&\$25&\\6&\$21&&\$10
\end{tabular}[/tex]
Part A:
From the table, the fixed cost is $10 and the total cost of producing 5 posters is $25.
Therefore, the variable cost of producing 5 posters is given by Total cost - fixed cost = $25 - $10 = $15.
Part B:
The marginal cost is the cost of producing one additional unit of poster.
From the table, the total cost of producing the 6 posters is given by $21 + $10 = $31 and the total cost of producing 5 posters is $25.
Therefore, the marginal cost of producing the 6th poster is given by the total cost of producing 6 posters minus the total cost of producing 5 posters = $31 - $25 = $6.
