According to the chart, what is the marginal cost of producing the second pie?
Answer (2)
0.50
Explanation
Understanding the Problem The problem provides a table showing the marginal cost of producing apple pies. We need to verify the marginal cost of producing the second pie according to the chart.
Identifying the Marginal Cost To find the marginal cost of producing the second pie, we look at the row where 'Pies Produced Per Day' is 2. The corresponding 'marginal Cost' value in that row is indeed $0.50.
Conclusion Therefore, according to the chart, the marginal cost of producing the second pie is $0.50 .
Examples
Understanding marginal cost is crucial in business for making informed decisions about production levels. For instance, if a bakery knows the marginal cost of each additional pie, they can determine the optimal number of pies to bake each day to maximize profit. If the marginal cost starts to exceed the revenue from each pie, the bakery might consider cutting back production or adjusting prices. This concept applies to various industries, from manufacturing to service, helping businesses optimize their operations and profitability.
The marginal cost of producing the second pie is determined by consulting the relevant chart and calculating the difference in total costs for producing one and two pies. Typically, this results in a value of $0.50 for the second pie. Thus, the answer is $0.50.
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