Answer to Question #64731 in Economics for fathia

Question

A restaurant is considering adding a new employee. The marginal cost of the new worker is the







A.

amount paid to all current workers.



B.

amount paid to all the​ workers, both the new one and the current workers.



C.

amount paid to the new worker.



D.

additional revenue created by having an additional worker.

Answer 1

According to definition, marginal cost is the change in total cost that arises when the quantity produced is incremented by one unit. In our case, the marginal cost is the change in the total cost that arises when new worker added, i.e. it is a new worker salary, or the amount paid to the new worker. Thus, the right answer is C.