A driver wishes to buy gasoline and have his car washed.He finds that the wash costs $2.50 when he buys 19 gallons at $1.10 each, but that if he buys 20 gallons, the car wash is free.Thus the marginal cost of the twentieth gallon to him is:
A)$1.40.
B)$1.10.
C)-$1.40.
D)-$1.10.
E)$2.50.

Question

Quizplus · Accepted Answer

The marginal cost of the twentieth gallon is the difference in total cost between buying 19 gallons and 20 gallons. When buying 19 gallons, the total cost is 19 * $1.10 + $2.50 = $23.40. When buying 20 gallons, the cost is 20 * $1.10 = $22.00. The marginal cost is $22.00 - $23.40 = -$1.40.

A Driver Wishes to Buy Gasoline and Have His Car