Use the table below to answer the following questions.
Table 12.2.3

-Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm. The marginal cost of increasing production from 4 balloons an hour to 5 balloons an hour is

Question

Use the table below to answer the following questions.
Table 12.2.3
 
-Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm. The marginal cost of increasing production from 4 balloons an hour to 5 balloons an hour is

Quizplus · Accepted Answer

To find the marginal cost of producing an additional balloon, we need to look at the change in total cost when we increase production by one unit. In this case, the total cost of producing 4 balloons is $17.50 and the total cost of producing 5 balloons is $22.30.

Marginal Cost = (Change in Total Cost) / (Change in Quantity)
Marginal Cost = ($22.30 - $17.50) / (5 - 4)
Marginal Cost = $4.80

Therefore, the answer is D, $4.80.

Use the Table Below to Answer the Following Questions