Question

Help!

When the firm increases the output from 210 to 220 surfboards, then the marginal cost (MC) is: *

a. $500

b. $50

c. $10

d. None of the above.

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Answer 1

$50 per additional surfboard produced

Step-by-step explanation:

1 extra unit of labor is required to increase production from 210 to 220 surfboards.

each unit of labor costs $500 per week

the marginal cost for the whole batch of 10 surfboards = $500, but we must calculate it on a per unit basis = $500 / (220 - 210) = $50 per additional surfboard produced