Carl\'s Detailing is a small business that travels to people\'s homes to meticul
ID: 1112008 • Letter: C
Question
Carl's Detailing is a small business that travels to people's homes to meticulously clean their high-end sports cars. Carl hires detailers (labor) at a wage of $80 per day per worker. A van that is used to carry cleaning supplies to clients' homes has a fixed cost of $20 per day. The table shows the relationship between the number of cars cleaned and the number of detailers. The marginal cost of cleaning the first car is _____, and the marginal cost of cleaning the third car is _____
Please show the steps to getting the answer.
Labor (detailers per day) Detailed cars (cars cleaned per day) 0 0 1 1 3 2 6 3Explanation / Answer
Since cost of hiring a Labour is 80 per day.
20 is fixed cost supply the materials per day.
Marginal cost is the addition of total cost due to hiring one more input.
Since for cleaning the first car, a Labour is hired and van for carrying cleaning supply is required.
It means MC of cleaning first car will be = 80 +20
=$100
Similarly for cleaning third car, 3 additional labour are hired and van cost which is fixed for 1 day.
So MC of third car cleaning will be = 80*3 +20
=240+20
=$260