For a hypothetical firm, the total cost of producing 5 units of a commodity is Rs. 310 and that of producing 8 units is Rs. 850. If the firm has to spend Rs. 50 even when there is no output, what will be the marginal cost of producing the 8th unit?

Rs. 180

The correct answer is Option (2) → Rs. 180

Given data:

• Total cost of 5 units (TC₁) = ₹310

• Total cost of 8 units (TC₂) = ₹850

• Fixed cost (FC) = ₹50

We need to find the marginal cost of the 8th unit.

Step 1: Find total variable cost (TVC)

TVC = TC – FC

So,
For 5 units: TVC₁ = 310 – 50 = 260
For 8 units: TVC₂ = 850 – 50 = 800

Step 2: Find change in variable cost for extra units

Change in TVC = 800 – 260 = 540
Change in output = 8 – 5 = 3 units

Step 3: Find marginal cost (MC)

MC = Change in TVC / Change in output
MC = 540 / 3 = 180