Question

Suppose you have rented a car for $29.95/day. You can drive the first 150 miles without any additional charges. Each mile thereafter would cost you 15 cents. If you drive 160 miles, how much is your marginal cost?

Answer 1

The problem statement tells you the marginal cost is 15¢ per mile.

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Marginal cost is the additional cost incurred by driving one more mile.

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There is also a marginal cost associated with renting the car an additional day ($29.95). The problem statement is not specific as to which cost is of interest. We assume the mileage cost is the one of interest.