Question

Susan wishes to buy gasoline and have her car washed. she finds that if she buys 9 gallons of gasoline at $2 per gallon, the car wash costs $1.50, but if she buys 10 gallons of gasoline, the car wash is free. for susan, the marginal cost of the tenth gallon of gasoline is

Answer 1

The marginal cost is how much must be added from the ninth to the tenth gallons. For the 9 gallons and car wash, she would have paid ($2/gallon)*(9 gallons) + ($1.50/car wash) = $19.50
For the 10 gallons and car wash, she would pay ($2/gallon)*(10 gallons) + ($0/car wash) = $20.00

Therefore her marginal cost is $20.00 - $19.50 = $0.50