If you have already signed up for a plan with your cell phone company that gives you 4,000 free minutes for $39.99 per month with a cost of $0.35 per minute for any time exceeding the limit, your marginal cost curve is:
A) horizontal at a marginal cost of zero.
B) horizontal at a marginal cost of zero up to 4,000 minutes.
C) horizontal at a marginal cost of $0.35.
D) upward-sloping.

Question

Quizplus · Accepted Answer

The marginal cost is zero up to 4,000 minutes because those minutes are included in the plan. Beyond 4,000 minutes, the marginal cost is $0.35 per minute.

If You Have Already Signed Up for a Plan with Your