A lighthouse that serves a dangerous coastal area is built. The lighthouse cost $2 million to build and serves 200 ships a month. If the shipping in the area increases so that 400 ships pass by a month, the increase in additional costs of providing the light to these new ships is
A)$2 million.
B)$10,000.
C)$5,000.
D)$0.

Question

Quizplus · Accepted Answer

The cost of building the lighthouse is a fixed cost, and the cost of providing the light does not increase with the number of ships. Therefore, the additional cost of serving more ships is $0.

A Lighthouse That Serves a Dangerous Coastal Area Is Built