Table 2.2

-Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 4 hours per day. If she is following the marginal principle, what must her marginal benefit be?
A) $12
B) $18
C) $24
D) $30

Question

Table 2.2
 
-Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 4 hours per day. If she is following the marginal principle, what must her marginal benefit be?
A) $12 
B) $18 
C) $24 
D) $30

Quizplus · Accepted Answer

According to the marginal principle, a rational decision-maker will continue an activity up to the point where the marginal benefit equals the marginal cost. Since Krystal decides to stay open for 4 hours, the marginal cost of the fourth hour represents the marginal benefit she expects to receive, which is $24.

Table 2.2 -Krystal Runs a Nail Salon and Needs to Decide How