- 1). Find the price of the last unit of the commodity. In economics problems, this should be given in a list (usually theoretical) that displays how much the commodity costs as a function of how many there are left. For example, assume your farm has four cows. You need the price of the fourth cow, assuming that you already have three cows in your possession. Call this price "P."
- 2). Find the discount rate for the period of time in which you are calculating the MUC. For example, if you are calculating the MUC using periods of years, you would need to know the discount rate for the commodity for a given year. In the cow example, this would be equal to how much the cow's worth will grow after one year. Call this discount rate "D."
- 3). Calculate MUC. Use the equation MUC = P / (1 + D). For example, if the fourth cow on your farm is worth $200 and the discount rate for it is 10 percent, you would calculate MUC as MUC = 200 / (1 + 0.10) = 200/1.1 = 181.82. Thus the marginal user cost for your farm's cow is $181.82.
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