Table 1-3
Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-3. Using marginal analysis, determine how many hours should Santiago extend his store's hours of operations?
A) 2 hours
B) 3 hours
C) 4 hours
D) 5 hours
E) 6 hours

Question

Table 1-3
  Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-3. Using marginal analysis, determine how many hours should Santiago extend his store's hours of operations?
A) 2 hours 
B) 3 hours 
C) 4 hours 
D) 5 hours 
E) 6 hours

Quizplus · Accepted Answer

Marginal analysis involves comparing the marginal benefit to the marginal cost. Santiago should extend his store's hours until the marginal benefit of staying open for an additional hour is equal to or less than the marginal cost. Based on the table, this occurs at 4 hours.

Table 1-3 Santiago Runs a Comic Book Store in the in the Town