Question

​allison's auto art is a company that applies pinstripes to vehicles.​ allison's cost for a basic 1minus−color pinstriping job is​ $35, and she charges​ $95 for this service. for a total price of​ $175, allison will apply a fancier 3minus−color pinstripe application to an​ automobile, a service that adds an additional​ $40 to the total cost of the package. what is the marginal cost of moving up from the 1minus−color application to the 3minus−color ​application?

Answer 1

The marginal cost of upgrading from a 1-color pinstriping application to a 3-color application at Allison's Auto Art is $40, which is the additional amount charged for the fancier service.

Step-by-step explanation:

The student is asking about the marginal cost when upgrading from a 1-color to a 3-color pinstriping service. To find the marginal cost, we should calculate the difference in cost between the two services. The cost for a 1-color pinstriping job is $35 and the charge of the service is $95. For a 3-color pinstripe, the cost is not directly given, but it adds an additional $40 to the total price, which is $175.

The cost for the 3-color service can be calculated as:

Cost of 3-color pinstripe = Cost of 1-color pinstripe + Additional cost

= $35 + $40 = $75

Therefore, the marginal cost for the additional colors, which is the difference between the cost of 3-color and 1-color service, would be:

Marginal Cost = Cost of 3-color pinstripe - Cost of 1-color pinstripe

= $75 - $35 = $40

The marginal cost of upgrading to the 3-color pinstriping application is therefore $40.

Answer 2

In economics, marginal cost is the additional expenditure or cost you incur when you buy another more quantity of the product. When Allison bought the 1minus−color application, she spent a total of $130.

$35 + $95 = $130

When she upgraded to 3minus-color application, her cost now increased to

$175 + $40 = $215

Now, as mentioned, marginal cost is the additional cost incurred when buying one more quantity of the same product. Therefore, marginal cost = Δcost/Δquantity. Thus,

Marginal Cost = ($215-$130)/(3-1)
Marginal Cost = $42.5

The marginal cost is $42.5 per color application.