If a Firm's Total Costs Are $75 When It Produces

question 249

Multiple Choice

If a firm's total costs are $75 when it produces 10 units of output and $80 when it produces 11 units of output, then the marginal cost of producing the 11th unit is

• A) $1.
• B) $5.
• C) $8.09.
• D) $10.

---

Definitions:

Arbitrage Opportunity

A situation where it's possible to simultaneously purchase and sell an asset or security and profit from the price difference.

Warrant

A financial instrument that confers the right to buy a security, typically a stock, at a specific price before a certain date.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Straight-Bond Value

The value of a bond ignoring any embedded options, based purely on its coupon payments and principal repayment.