Asked by Carmen Stavole on May 19, 2024
Verified
(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the second cake?
A) $5
B) $10
C) $25
D) $35
Marginal Cost
The augmentation in complete financial commitment resulting from the manufacture of one more unit of a good or service.
Fixed Costs
Costs that remain constant regardless of production or sales volume, including rent, salaries, and insurance fees.
Birthday Cakes
Bespoke or pre-made cakes specifically designed and decorated for celebrating someone's birthday.
- Familiarize with the notion of marginal cost and its essential relevance to choices in production activities.
Verified Answer
Learning Objectives
- Familiarize with the notion of marginal cost and its essential relevance to choices in production activities.
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