Question

a shoe store sells 40 pairs of shoes in one week. With an additional salesperson, the store can sell 44 pairs of shoes. The additional 4 pairs of shoes a week is the store's marginal cost.​ Correct OR False.

Answer 1

The marginal cost of the store is not the additionally sold shoes. Hence it is FALSE statement.

Explanation:

Marginal cost can be defined as the ratio of the total cost and the quantity sold. It is the increase or decrease in the total cost the business experience with the production of goods or serving the customers. Marginal costs are used for product decisions.

If the marginal cost is lesser than the price, revenue will be greater than the added cost and if the marginal cost is higher than the price, it states that there will be loss. The formula for marginal cost is as follows,

$\text {Marginal cost}=\frac{\Delta t c}{\Delta q}$

where $\Delta t c$ is the changing total cost and $\Delta q$ is the changing quantity

Therefore, it can be stated that not only the additionally added quantity will make it to the marginal cost.

Answer 2

Explanation:

I do not think that is true even considering a linear cost of every 4 pairs of shoes