You sell hot dogs at a baseball game for $2.75 each. You have 100 hot dogs to sell at an average cost to you of $1.75 each. The marginal cost at q=100 is $1.90. Assume you can always sell out of hot dogs. Will increasing the number of hot dogs you have to sell increase or decrease the average cost?

Question

Quizplus · Accepted Answer

Increasing the number of hot dogs will increase the average cost because the marginal cost ($1.90) is higher than the current average cost ($1.75).

You Sell Hot Dogs at a Baseball Game for $2