If an additional unit of labor costs $20 and has a MPP of 15 units of output,the marginal cost is
A)$0.75.
B)$1.33.
C)$30.00.
D)$300.00.

Question

Quizplus · Accepted Answer

Marginal cost (MC) is the additional cost incurred in producing an additional unit of output. 
MC = cost of additional input / additional output 
In this case, the cost of additional labor is $20, and the additional output is given as 15 units. 
So, MC = $20 / 15 = $1.33. 
Therefore, the best choice is B.

If an Additional Unit of Labor Costs $20 and Has