Question

If a store has a “buy one, get one free” sale and an item costs $10, what is the marginal cost of the second item?
A) $7.50
B) $10
C) $5
D) $15
E) $0

Answer 1

It would be $0 because if you already bought one the second one is free and $0 you wouldn’t have to pay anything

Answer 2

If a store has a “buy one, get one free” sale and an item costs $10, then the marginal cost of the second item would be option E). 0.

What is marginal cost?

The marginal cost helps to determine the additional cost that a company has to incur while producing one extra unit.  In the case of buy one get one free item the final price tend to include the cost of both products.

Therefore, the marginal cost of the second product would be zero as the producer does not have to bear any additional cost as the product is free.

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