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A Construction Company Has Built 25 Houses So Far This

Question 83

Multiple Choice

A construction company has built 25 houses so far this year at a total cost to the company of $7.2 million. If the company builds a 26th house, its total cost will increase to $7.5 million. Which of the following statements is correct?


A) For the first 25 houses, the average cost per house was $288,000.
B) The marginal cost of the 26th house, if it is built, will be equal to the average cost per house.
C) If the company can experience a marginal benefit of $288,000 by building the 26th house, then the company should build it.
D) All of the above are correct.

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