A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is

A) $100.
B) $175.
C) $700.
D) $225.

Question

palesa swafo · Accepted Answer

Final Answer : A, Explanation :  The marginal cost of the fourth ton is the additional cost incurred by purchasing the fourth ton. Initially, the firm pays $200 per ton for three tons, totaling $600. With the discount, the firm pays $175 per ton for four tons, totaling $700. The additional cost for the fourth ton is $700 - $600 = $100.

A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is

A) $100.
B) $175.
C) $700.
D) $225.

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Learning Objectives

Related questions

A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day isA) $100.B) $175.C) $700.D) $225.

Definitions

Learning Objectives

Learning Objectives

Related questions

A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is

A) $100.
B) $175.
C) $700.
D) $225.