Question

If Southern Technology can produce 100 DVDs for $100 and 200

DVDs for $150, what is the marginal cost per DVD of the additional
100 DVDs?

Answer 1

The marginal cost per DVD for the additional 100 DVDs is $0.50, calculated by the increase in total cost divided by the additional number of DVDs produced.

Step-by-step explanation:

The marginal cost per DVD for the additional 100 DVDs produced by Southern Technology is calculated by determining the increase in total cost when production is increased from the first 100 DVDs to the next 100 DVDs. The initial 100 DVDs cost $100 to produce, and increasing production to 200 DVDs raises the total cost to $150. The marginal cost is the difference in total cost divided by the change in quantity, which is ($150 - $100) / (200 DVDs - 100 DVDs) = $50 / 100 DVDs = $0.50 per DVD.