Final answer:
The marginal cost of the 6th house is calculated based on the additional labor required, which amounts to $1000.
Step-by-step explanation:
To calculate the marginal cost of the 6th house, it is essential to consider the additional labor cost incurred by hiring five more workers. Marginal cost represents the change in total cost resulting from producing one additional unit. In this case, the marginal cost is predominantly influenced by the incremental labor expenses associated with increasing production.
The cost of labor for the 6th house can be computed by multiplying the number of additional workers hired by their daily wage. With the employment of five more workers at a daily wage of $200 each, the total additional labor cost for producing one more house is determined by:
5 workers × $200 per worker = $1000
This $1000 signifies the marginal cost of the 6th house, and it encapsulates the extra expenditure incurred solely due to the augmented labor force. It is crucial to recognize that other factors, such as materials, overhead, or fixed costs, may contribute to the overall marginal cost. However, in this specific context, the calculation emphasizes the immediate impact of increased labor on production costs.
Understanding the marginal cost of each unit is vital for businesses to make informed decisions about production levels and pricing strategies. It enables them to assess the feasibility and profitability of expanding production, providing a valuable tool for cost analysis in the decision-making process.