Question

Suppose the cost of 5 pencils is $1.50. The cost of 6 pencils is $1.75. The marginal cost of the sixth pencil is

Answer 1

$0.25

Step-by-step explanation:

The marginal cost of the sixth pencil is given by the difference in total cost of purchasing 6 pencils from the cost of purchasing 5 pencils. That is, the change in cost caused by the addition of the sixth unit of output:

`MC = \$1.75-\$1.50 = \$0.25`

The marginal cost of the sixth pencil is $0.25