Question

A bakery is considering whether or not to hire an extra baker for the night shift. If that baker would earn $20 per hour, work an 8-hour shift, and produce 100 pastries that would sell for $3 each, the marginal cost of producing an additional pastry is _____.

Answer 1

1.60 each

Explanation:

Answer 2

The Marginal Cost of the new baker is $1.60.

Step-by-step explanation:

Consider the provided information.

Baker would earn $20 per hour, that means

Baker Wage = $20 per hour

Baker will work for 8 hours

So the total money baker will earn is:

Total cost = 8 × 20 = $160

Baker produce 100 pastries.

That means the quantity is 100.

`\text{Marginal Cost}=(\triangle TC)/(\triangle Q)`

Where ΔTC is the total cost and ΔQ is the quantity.

Substitute the respective values in the above formula.

`(160)/(100)=1.6`

Hence, the Marginal Cost of the new baker is $1.60.