When Lonnie produces 1 pair of cowboy boots his costs total $300. When he produces 2 pairs of cowboy boots his total costs are $500. This means that Lonnie's marginal cost of producing the second pair of cowboy boots is $200.

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost of producing one more unit of a product. In this case, the marginal cost of producing the second pair of cowboy boots is calculated by subtracting the total cost of producing one pair ($300) from the total cost of producing two pairs ($500), which gives us $200. Therefore, the statement is true and the answer is A.

When Lonnie Produces 1 Pair of Cowboy Boots His Costs