Consider a firm that produces widgets. The firm’s short-run total cost (TC) function is given by TC = 50 + 10Q + 2Q2, where Q represents the quantity of widgets produced. In this context, the firm encounters fixed costs of 50 and variable costs that depend on the production quantity. As the firm increases production, it observes increasing marginal costs due to the quadratic term in its cost function.
What is the marginal cost (MC) when the firm produces 10 widgets?