Question

6

Marginal Cost of producing Pies
$1.60
$1.40
$1.20
$1.00
Marginal Cost
SO 80
$0.60
$0.40
$0.20
$0.00
O Pies
1 Pies
5 Pies
6 Pies
2 Pies 3 Pies 4 Pies
Quantity Supplied
According to the graph, the marginal cost begins to increase when the producer makes
0
two pies.
three pies
O four pies.
O five pies
Save and Exit
Next
Mark this and return
Submit

Answer 1

Answer: Four pies.

Step-by-step explanation:

Marginal cost is the additional cost of producing one extra unit of a good or service.

From this graph we see the marginal cost rise when the first pie is produced and then it subsequently decreases as the second and third pie is produced which is where it reaches its lowest point.

From the fourth pie, the marginal cost begins to rise again which means the marginal cost begins to increase when the producer makes four pies.