Question

Liam wants to buy some milk and a box of cereal. If Liam buys 4 gallons of milk at $3.00 per gallon, the box of cereal costs $2.00. If he buys 5 gallons of milk, the box of cereal is free. For Liam, the marginal cost of buying a fifth gallon of milk is

Answer 1

The marginal cost of buying a fifth gallon of milk for Liam would be $3.00.

Step-by-step explanation:

The marginal cost of buying a fifth gallon of milk for Liam can be calculated by comparing the cost of buying 4 gallons of milk with the cost of buying 5 gallons of milk.

If Liam buys 4 gallons of milk at $3.00 per gallon, the total cost of the milk would be 4 x $3.00 = $12.00.

If Liam buys 5 gallons of milk, the box of cereal is free, so the additional cost would be the cost of buying the 5th gallon of milk, which is $3.00.

Therefore, the marginal cost of buying a fifth gallon of milk for Liam is $3.00.