Question

Stephen runs a pet salon. He is currently grooming 130130 dogs per week. If instead of grooming 130130 ​dogs, he grooms 131131 ​dogs, he will add ​$65.8265.82 to his costs and ​$68.1268.12 to his revenues. What will be the effect on his profits of grooming 131131 dogs instead of 130130 ​dogs?

Answer 1

Answer:

Profit will increase by $2.3

Explanation:

Data provided in the question:

If instead of grooming 130130 ​dogs, he grooms 131131 ​dogs

Marginal cost = $65.82

Marginal revenue = $68.12

Now,

The effect on his profits of grooming 131 dogs instead of 130 ​dogs will be:

Change in profit = Marginal revenue - Marginal cost

or

Change in profit = $68.12 - $65.82

or

Change in profit = $2.3

Hence,

Profit will increase by $2.3