Question

It costs a company $35,000 to produce 500 graphing calculators. The company’s cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then___________.

Answer 1

Marginal cost is greater than its average cost.

Step-by-step explanation:

Given that,

Cost of producing 500 graphing calculators = $35,000

Cost of producing 501 graphing calculators =$35,080

Therefore,

The marginal cost = Cost of 501 graphing calculator - Cost of 500 graphing calculator

= $35,080 - $35,000

= $80

Average cost:

= $35,000 ÷ 500

= $70

Therefore, the marginal cost is greater than its average cost.