If nineteen workers are each paid $10 an hour and hiring the twentieth worker requires that all workers be paid $11 an hour, the marginal factor cost of the twentieth worker is $30.

Question

Quizplus · Accepted Answer

The marginal factor cost is the additional cost of hiring one more worker. In this case, hiring the twentieth worker requires that all workers be paid $11 an hour, which is an additional cost of $1 per hour for each of the nineteen workers, or a total of $19. The marginal factor cost is therefore $19.

If Nineteen Workers Are Each Paid $10 an Hour and Hiring