Use the following to answer question:
-(Figure: The Marginal Analysis of Cell Phones)Use Figure: The Marginal Analysis of Cell Phones.You are considering purchasing cell phones for your department.If you buy the fifth cell phone,your change in total profit will be equal to:

Question

Use the following to answer question: 
-(Figure: The Marginal Analysis of Cell Phones)Use Figure: The Marginal Analysis of Cell Phones.You are considering purchasing cell phones for your department.If you buy the fifth cell phone,your change in total profit will be equal to:

Quizplus · Accepted Answer

The change in total profit when purchasing the fifth cell phone is calculated by the change in total revenue minus the change in total cost. If the marginal revenue from the fifth cell phone is less than the marginal cost of the fifth cell phone, the change in total profit will be negative. Without specific numbers from the figure, the general principle of marginal analysis indicates that if purchasing an additional unit (the fifth cell phone, in this case) does not cover its cost, it results in a decrease in total profit, which is represented by option B, -$2.

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