Table 1-2
Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $16 per hour.
-Refer to Table 1-2. Using marginal analysis, how many hours should Thuy Anh extend her flower shop's hours of operations?
A) 2 hours
B) 3 hours
C) 4 hours
D) 5 hours
E) 6 hours

Question

Table 1-2
  Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $16 per hour.
-Refer to Table 1-2. Using marginal analysis, how many hours should Thuy Anh extend her flower shop's hours of operations?
A) 2 hours 
B) 3 hours 
C) 4 hours 
D) 5 hours 
E) 6 hours

Quizplus · Accepted Answer

Marginal analysis involves comparing the additional benefits and costs of extending operations. Thuy Anh should extend her shop's hours until the marginal benefit equals the marginal cost. If Table 1-2 shows that this balance occurs at 4 hours, then 4 hours is the optimal extension.

Table 1-2 Thuy Anh Runs a Small Flower Shop in Shop