Table 13-1
Measures of Cost for Splashy Cardboard Kayak Factory.

-Refer to Table 13-1. What is the marginal cost of producing the first kayak?

Question

Table 13-1
Measures of Cost for Splashy Cardboard Kayak Factory.
 
-Refer to Table 13-1. What is the marginal cost of producing the first kayak?

Quizplus · Accepted Answer

The marginal cost is the change in total cost when one more unit is produced. In this case, the total cost of producing 1 kayak is $2, and the total cost of producing 2 kayaks is $24, so the marginal cost of producing the first kayak is $24 - $2 = $22. However, this option is not available in the answer choices, so the closest option is choice C, which is $2. As for the best choice, it depends on the context of the decision being made. If the decision is based solely on minimizing cost, then producing only 1 kayak would be the best choice, as the marginal cost increases significantly for additional kayaks. However, if other factors such as demand, revenue, and profit are taken into consideration, then producing more than one kayak may be the better choice.

Table 13-1 Measures of Cost for Splashy Cardboard Kayak Factory