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Steve Owns a Bike Store

Question 62

Multiple Choice

Steve owns a bike store.His total costs are $1.2 million per year.Last year,Steve sold 1,200 bikes.If Steve sells 1,250 bikes this year (50 more than last year) and his total cost increases to $1.28 million,we know that the:


A) marginal revenue of selling 1,250 bikes is now $1,000.
B) average return of selling bikes has decreased.
C) average cost of selling bikes is unchanged.
D) marginal cost of those 50 bikes is $80,000.
E) marginal cost of those 50 bikes is $1.28 million.

Correct Answer:

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