You own a pizza shop called "Pizzas'R' Us". Currently you are paying your cooks an hourly wage of $20. You sell a medium pizza for $10. By hiring more cooks, you can increase your pizza production as shown in the following table. $$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Number of } \ \text { cooks } \end{array} & \begin{array} { l } \text { Total production of } \ \text { pizzas each hour } \end{array} \ \hline 0 & 0 \ \hline 1 & 4 \ \hline 2 & 7 \ \hline 3 & 9 \ \hline 4 & 10 \ \hline 5 & 10 \ \hline \end{array}$$ If you operate one hour every day, what is the marginal cost of hiring the 4^th cook?

Question

Quizplus · Accepted Answer

To find the marginal cost, we need to look at how much the total cost increases when we hire an additional cook.

From the table, we can see that going from 3 to 4 cooks increases the production from 9 to 10 pizzas per hour.

To produce an additional pizza, we need to pay the hourly wage of the additional cook, which is $20.

Therefore, the marginal cost of hiring the 4th cook is $20.

Option B is the correct answer.

You Own a Pizza Shop Called "Pizzas'R' Us If You Operate One Hour Every Day, What Is the Are