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Scenario 1-2 Suppose a Cigar Manufacturer Currently Sells 1,500 Cigars Per Week

Question 214

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Scenario 1-2
Suppose a cigar manufacturer currently sells 1,500 cigars per week and makes a profit of $3,000 per week.The plant foreman observes,"Although the last 500 cigars we produced and sold increased our revenue by $7,500 and our costs by $7,000,we are only making an overall profit of $3,000 per week so I think we need to cut back on production.
-Refer to Scenario 1-2.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 500 cigars?


A) marginal cost
B) operating cost
C) explicit cost
D) Any of the above terms are correct.

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