Question

Labor is the only variable input for Elliot's dog-walking service. His labor costs are $300 a day and his service walks 25 dogs per day. His labor costs increase to $315.50 a day to walk 26 dogs per day. The marginal cost of walking that 26th dog is A) $15.50. B) $19.50. C) $29.50. D) indeterminate from the information given.

Answer 1

A) $15.50

Step-by-step explanation:

MC = Change in Total cost / Change in output

The marginal cost of walking that 26th dog is = ($315.50 - $300) / (26 -25)= $15.50 / 1 = $15.50. So, Option A is the correct option