A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 3^rd hour of work?

Question

Quizplus · Accepted Answer

The marginal cost is the change in total cost divided by the change in quantity. In this case, the change in quantity is 1 computer (from 7 to 8 computers), and the change in total cost is $1,240 (from $4,200 to $5,440). Therefore, the marginal cost is $1,240.

A Firm Pays Pam $40 Per Hour to Assemble Personal