Question

Suppose a painting company paints the exteriors of homes. If the marginal average cost (per house) is $140 when 20 houses are painted, and the average cost (per house) to paint 20 houses is $1,200, estimate the total cost of painting 21 houses. Do not include a dollar sign in your answer.

Answer 1

Answer:

$25,340

Explanation:

Considering that the statement indicates that the average cost of painting 20 houses is $1,200 per house and that the marginal cost that is the additional cost to produce another unit is $140, you can calculate the cost of painting 21 houses by doing the following:

($1,200*20)+($1,200+$140)= $24,000+$1,340= $25,340

The total cost of painting 21 houses is $25,340.