If Gorgeous Sands Resort has a constant marginal cost of $20,000 for each resort unit and a constant marginal cost of $500 for operating each resort unit, what is Gorgeous Sands Resort's long- run marginal cost per resort unit?
A)$19,500
B)$500
C)$20,500
D)$20,000

Question

Quizplus · Accepted Answer

The long-run marginal cost is the sum of the constant marginal cost for each unit plus the variable cost for operating each unit. Therefore, the long-run marginal cost per resort unit for Gorgeous Sands Resort is $20,000 + $500 = $20,500.

If Gorgeous Sands Resort Has a Constant Marginal Cost of $20,000