Ernie's Earmuffs Produces 200 Earmuffs Per Year at a Total

question 129

Multiple Choice

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

• A) $105
• B) $35
• C) $9.55
• D) $5

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