Fred has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well. If the price of a burger is $3, fries are $2, and drinks are $1, but a value meal with all three costs $4.80, the marginal cost to Ted of the drink is:

Question

Quizplus · Accepted Answer

The value meal costs $4.80, which is $0.20 less than buying the burger and fries separately for $5. Therefore, the marginal cost of adding the drink is negative $0.20.

Fred Has Decided to Buy a Burger and Fries at a Restaurant