Question

Allison's Auto Art is a company that applies pinstripes to vehicles. Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package. What is Allison's marginal benefit if she sells a basic 1-color job?

Answer 1

Allison's marginal benefit if she sells a basic 1-color job is $40.

Step-by-step explanation:

The marginal cost is additional cost added to the total cost with the change. Here, the change is moving up from 1-color application to 3-color application. At 1- color application, the cost of $35 is incurred by the company. however, with the 3-color application, the total cost will increase by $40.

Therefore, Allison's marginal benefit if she sells a basic 1-color job is $40.