The output of a bakery is 250 loaves of bread, when 10 workers are employed. If one more worker is hired, the total output increases to 275 loaves

Given that labor is the only variable input that the bakery uses, and the market wage rate is $10, calculate the marginal cost when employment is increased from 10 to 11 workers.


The marginal cost when 275 loaves are produced = Change in total cost / Change in total output = $10/25 = $0.40.

Economics

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