A dim sum restaurant in Hong Kong has average variable cost (AVC) of $80 per customer at 100 customers, and $85 at 101 customers. The marginal cost of the 101st customer is:

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Accepted Answer

C. TVC at 100 = 80×100 = 8,000. TVC at 101 = 85×101 = 8,585. MC = ΔTVC/ΔQ = 585/1 = $135. MC exceeds AVC when AVC is rising.

A dim sum restaurant in Hong Kong has average variable cost (AVC) of $80 per customer at 100 customers, and $85 at 101 customers. The marginal cost of the 101st customer is:

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