Each firm in the egg industry (competitive)produces 15 million eggs per year.Each egg has an average cost of $0.02 and they sell an egg for $0.06.The marginal cost of a string is

Question

Quizplus · Accepted Answer

The marginal cost refers to the additional cost incurred when producing one additional unit of output. In this case, we are given that each firm produces 15 million eggs per year, which means that their total cost is 15 million multiplied by the average cost of $0.02 per egg, which is $300,000. Since we are not given any information about how the total cost changes with production, we cannot determine the marginal cost directly. However, we know that the selling price of an egg is $0.06, which is greater than the average cost of $0.02. This indicates that each additional egg sold contributes more revenue than cost, which implies that the marginal cost is less than the selling price of $0.06. Therefore, the best choice is B) $0.06.

Each Firm in the Egg Industry (Competitive)produces 15 Million Eggs