Question

Mary buys cell-phone services from a company that charges $30 per month. For that $30 she is allowed 600 minutes of free calls and then pays 25 cents per minute for any calls above 600 minutes. Mary has used 300 minutes this month so far. What is her marginal cost per minute of making two more calls lasting 10 minutes each?

Answer 1

Zero

Step-by-step explanation:

Given:

Per month charges = $30

Free minutes allowed for calls = 600

Minutes used = 300

Now,

the minutes left = 600 - 300 = 300 minutes

Total minutes of extra calls = 2 × 10 = 20 minutes

since, the additional call minutes are less than the minutes left for free calls, there will be no extra amount charged for the calls made.

Hence, the marginal cost for additional calls will be zero.