Asked by Latanya Haynes on Jul 27, 2024
Verified
(Figure and Table: Variable,Fixed,and Total Costs) Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 19 to 36 bushels of wheat is:
A) $23.53.
B) $11.76.
C) $22.22.
D) $11.11.
Marginal Cost
The increment in total financial output required for producing one more unit of a product or service.
Production
The process of creating goods or services by combining labor, capital, and resources to meet consumer demand.
Bushels
A unit of volume that is used primarily in the United States to measure agricultural products such as grain.
- Assess the effects of modifications in production volumes on the marginal cost.
Verified Answer
CC
Cynthia CastelanJul 28, 2024
Final Answer :
B
Explanation :
To calculate the marginal cost of increasing production from 19 to 36 bushels of wheat, we need to look at the change in total cost. From the table, we see that producing 19 bushels of wheat costs $200 in total, while producing 36 bushels of wheat costs $436 in total. The change in total cost is therefore $436 - $200 = $236. The change in quantity produced is 36 - 19 = 17 bushels. Therefore, the marginal cost is $236 / 17 = $13.88 per bushel. However, since the question is asking for the marginal cost to the nearest cent, we round to $13.89. Therefore, the correct answer is B) $11.76, which is the marginal cost per bushel of wheat rounded to the nearest cent.
Learning Objectives
- Assess the effects of modifications in production volumes on the marginal cost.