Ask Question
19 January, 12:22

Tony is the owner of Tony's Taqueria. Tony is a profit-maximizing owner whose firm operates in a competitive market. An additional worker costs Tony $200 and has a marginal productivity of 40 tacos. Assuming no other variable costs, what is the marginal cost of a taco? a. $200 b. $8 c. $5 d. There is insufficient information available to answer this question.

+2
Answers (1)
  1. 19 January, 12:49
    0
    (c) $5

    Explanation:

    Remember, To calculate marginal cost, we divide the change in production costs by the change in quantity.

    In this example, the change in production cost is $200 (for hiring an additional worker) while the change in quantity of taco is 40 (increase in marginal productivity).

    The marginal cost = $200/40

    we get $5 as the marginal cost.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Tony is the owner of Tony's Taqueria. Tony is a profit-maximizing owner whose firm operates in a competitive market. An additional worker ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers