A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million.If the company builds a 31^st house,its total cost will increase to $7.76 million.Which of the following statements is correct? A)For the first 30 houses,the average cost per house was $250,000. B)The marginal cost of the 31^st house,if it is built,will be $260,000. C)If the company can experience a marginal benefit of $275,000 by building the 31^st house,then the company should build it. D)All of the above are correct.

Question

Quizplus · Accepted Answer

The average cost per house for the first 30 houses is $7.5 million / 30 = $250,000, so statement A is correct. The marginal cost of the 31st house is $7.76 million - $7.5 million = $260,000, so statement B is correct. If the marginal benefit of building the 31st house is $275,000, which is greater than the marginal cost of $260,000, the company should build it, making statement C correct. Therefore, all statements are correct.

A Construction Company Has Built 30 Houses So Far This