Scenario 13-7
Farmer Jack is a watermelon farmer.If Jack plants no seeds on his farm,he gets no harvest.If he plants 1 bag of seeds,he gets 30 watermelons.If he plants 2 bags of seeds,he gets 50 watermelons.If he plants 3 bags of seeds he gets 60 watermelons.A bag of seeds costs $100,and the costs of seeds are his only costs.
-Refer to Scenario 13-7.Which of the following statements is(are)true of Farmer Jack's marginal cost?

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost incurred by producing an additional unit of output. In this scenario, the only cost incurred by Farmer Jack is the cost of seeds, which is $100 per bag. Therefore, his marginal cost is constant and equal to $100. This is true for all levels of output, whether he plants no seeds or three bags of seeds, as the only cost is the cost of the seeds. Option (iii) mentions this correctly, and option (i) is not relevant to marginal cost. Option (ii) is not entirely accurate, as the marginal cost does not change with the level of output. Hence, the correct option is B.

Scenario 13-7 Farmer Jack Is a Watermelon Farmer.If Jack Plants No Seeds