The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.

The marginal cost of the 4ᵗʰ employee is:
A)$9,500.
B)$10,750.
C)$11,000.
D)$13,000.

Question

The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.  
  
The marginal cost of the 4ᵗʰ employee is:
A)$9,500. 
B)$10,750. 
C)$11,000. 
D)$13,000.

Quizplus · Accepted Answer

The total cost of 4 employees is $38,000 (= $9,500 × 4). Thus, when the number of employees increases from 3 to 4, total labor costs increase by $11,000 (= $38,000 - $27,000).

The Accompanying Table Below Shows How Total Donations, Average Donations, Total