Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?

Question

Adonis Lambert

Business

17 March, 18:07

Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?

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Answers (1)

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Truffles · Answer 1

The marginal cost of each screen is $10,000.

Explanation:

Giving the following information:

They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals.

The marginal cost of each screen is $10,000. And the fixed costs are $20,000.

Six screens = 20000 + 10000*6 = $80,000