A playground equipment manufacturer plans to spend $300,000 on a new facility plus $160 for each swing set made.The formula C = 160n + 300,000 gives the cost in dollars to manufacture n swing sets. What is the marginal cost of the nth swing set? [Hint - the marginal cost of the nth swing set is the difference in cost of producing n + 1 swing sets and n swing sets).

Question

Quizplus · Accepted Answer

The marginal cost of the nth swing set is the difference in cost of producing n + 1 swing sets and n swing sets.

So, the marginal cost of the nth swing set is:

C(n+1) - C(n)
= (160(n+1) + 300,000) - (160n + 300,000)
= 160

Therefore, the marginal cost of the nth swing set is $160.

Hence, the best choice is B.

A Playground Equipment Manufacturer Plans to Spend $300,000 on a New