The figure above shows Kaley's marginal benefit from swimming with manatees (manatee is another name for a sea cow or dugong) and Scott's marginal cost of providing manatee swimming tours. At 1 manatee swim per week, Kaley's marginal benefit is ________ and Scott's marginal cost is ________.
A) $10, $40
B) $25; $25
C) $40; $10
D) $40; $40
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

At 1 manatee swim per week, Kaley's marginal benefit is $40 and Scott's marginal cost is $10. This can be found by looking at the points where the MB and MC curves intersect. Choice A is incorrect because Kaley's marginal benefit is higher than $10 at 1 manatee swim per week. Choice B is incorrect because Kaley's marginal benefit and Scott's marginal cost are not equal at 1 manatee swim per week. Choice D is incorrect because Scott's marginal cost is not as high as $40 at 1 manatee swim per week.

The Figure Above Shows Kaley's Marginal Benefit from Swimming with Manatees