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

Question 2

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) $9.55
B) $5
C) $35
D) $105

Correct Answer:

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