The RideEm Bicycles factory can produce 110 bicycles in a day at a total cost of $10,900 and it can produce 130 bicycles in a day at a total cost of $11,600. What are the company's daily fixed costs?

What is the marginal cost per bicycle?

C - fixed costs; b - costs per bicycle;

c + 110 b = 10,900

c + 130 b = 11,600

c = 10,900 - 110 b

10,900 - 110 b + 130 b = 11,600

20 b = 700

b = 700 : 20 = $35

c + 110 * 35 = 10,900

c + 3,850 = 10,900

c = 10,900 - 3,850

c = $7,050 (daily fixed costs)

Marginal cost is the cost of producing one more unit of goods (one more bicycle).

Answer:

The company's daily fixed cost is $7,050.

The marginal cost per bicycle is $35.