Question

Austin's total fixed cost at the bakery is $3,600 a month. Austin employs 20 workers and pays each worker $8 an hour. The marginal product of the twentieth worker is 12 iced cupcakes an hour. What is the marginal cost of the last cupcake produced by the last worker Austin hired?

Answer 1

$0.66

Step-by-step explanation:

Marginal cost is the cost of producing one extra unit of a product.

if each worker is paid $8, then the marginal cost of producing the last cupcake = $8 / 12 = $0.66