A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million.If the company builds a 31ˢᵗ house,its total cost will increase to $7.76 million.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

For option A, we divide the total cost ($7.5 million) by the number of houses built (30) to get the average cost per house:

$7.5 million / 30 houses = $250,000 per house

Therefore, option A is correct.

For option B, we can calculate the marginal cost of the 31st house by subtracting the total cost of the first 30 houses from the total cost of all 31 houses:

$7.76 million - $7.5 million = $260,000

Therefore, option B is correct.

For option C, if the company can experience a marginal benefit of $275,000 by building the 31st house, it would be worthwhile to build it as long as the marginal cost is less than $275,000. From option B, we know that the marginal cost is $260,000, which is less than $275,000. Therefore, option C is also correct.

Overall, all of the above statements are correct, so the answer is D.

A Construction Company Has Built 30 Houses So Far This