Question

Suppose the value of owning a first car is worth $30,000 to you, and the value of owning a second car is worth $24,000 to you. Suppose the price of each car is $25,000.Assume you have already purchased the first car. Since the total benefit of owning two cars equals $54,000, and the total cost of two cars costs $50,000, should you purchase the second car

Answer 1

Answer:

No, the second car shouldn't be purchased.

Explanation:

After buying the first car, when second car is to be brought the marginal benefit is lower than marginal cost. So, only one car should be brought.