There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Suppose 10 shells have been fired off. What is the marginal cost of firing off one more shell?

Question

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell.  Suppose 10 shells have been fired off. What is the marginal cost of firing off one more shell?

Quizplus · Accepted Answer

The marginal cost is the additional cost of producing one more unit of output. In this case, producing one more shell will cost $10 because each shell costs $10. Therefore, the marginal cost of firing off one more shell is $10, which is answer choice B.

There Are 20 Residents in the Village of Towneburg