Table 1-1
Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.Using marginal analysis,determine how many hours should Eva extend her bakery's hours of operations?
A)2 hours
B)3 hours
C)4 hours
D)5 hours
E)6 hours

Question

Table 1-1
  Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour.
-Refer to Table 1-1.Using marginal analysis,determine how many hours should Eva extend her bakery'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 of an action to the additional costs. Eva should extend her bakery's hours until the marginal cost of staying open equals the marginal benefit. Without the specific data from Table 1-1, the assumption is that 4 hours is the point where marginal benefit equals marginal cost.

Table 1-1 Eva Runs a Small Bakery in the Village