Boeing produces commercial airliners. Assume that if Boeing produces 10 planes a year, its total costs are $500 million and that if produces 11 planes, its total costs are $560 million. The marginal cost of the 11th plane is $1 million. $60 million. $560 million. $1,060 million. $50.91 million.

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Business

Aiden Figueroa

15 May, 07:11

Boeing produces commercial airliners. Assume that if Boeing produces 10 planes a year, its total costs are $500 million and that if produces 11 planes, its total costs are $560 million. The marginal cost of the 11th plane is $1 million. $60 million. $560 million. $1,060 million. $50.91 million.

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Bella Garrett · Answer 1

The marginal cost of the 11th plane is $60 million.

Explanation:

Marginal cost refers to the cost of producing one more unit of output.

In this case, every unit of output is an airplane. It costs Boeing $500 million to produce 10 airplanes, and $560 million to produce 11 airplanes. SO the marginal cost of the eleventh airplane = cost of producing 11 airplanes - cost of producing 10 airplanes = $560 million - $500 million = $60 million