The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is:

Question

The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase.  The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is:

Quizplus · Accepted Answer

The total cost of a 2.5GHz computer is $1000 (= $900 + $100). Thus, going from a 2.5GHz to a 3.0GHz computer increases total cost from $1,000 to $1,200, meaning that marginal cost is $200.

The Following Table Shows the Relationship Between the Speed of a Computer's