Use the following to answer question:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the second cake?
A)$5
B)$10
C)$25
D)$35

Question

Use the following to answer question: 
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the second cake?
A)$5 
B)$10 
C)$25 
D)$35

Quizplus · Accepted Answer

To calculate the marginal cost of the second cake, we need to look at the difference in cost between the first and second cake. The cost of the first cake is $20, and the cost of the second cake is $30. Therefore, the marginal cost of the second cake is  $30 - $20 = $10. Since the fixed costs are already accounted for, the additional cost incurred to produce the second cake is equal to the marginal cost. Therefore, the best choice is B.

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