A Pen Manufacturer Determined That the Total Cost in Dollars

question 6

Multiple Choice

A pen manufacturer determined that the total cost in dollars of producing x dozen pens in one day is given by:
0 c x c 100
Find the marginal cost at a production level of 70 dozen pens and interpret the result.

• A) The marginal cost is $0.60/doz. The cost of producing 1 dozen more pens at a production level of 70 dozen pens is approximately $0.60.
• B) The marginal cost is $0.59/doz. The cost of producing 1 dozen more pens at a production level of 70 dozen pens is approximately $0.59.
• C) The marginal cost is $0.62/doz. The cost of producing 1 dozen more pens at a production level of 70 dozen pens is approximately $0.62.
• D) The marginal cost is $0.58/doz. The cost of producing 1 dozen more pens at a production level of 70 dozen pens is approximately $0.58.

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Futures Markets

Exchanges that facilitate the buying and selling of futures contracts, which are agreements to buy or sell assets at a future date at a predetermined price.

Leverage

The use of borrowed money to increase the potential return of an investment, which can also magnify the potential loss.

Margin

The difference between the selling price of a product or service and its cost, or the borrowed funds used to invest in securities.