Question

A firm produces garden hoses in California and Ohio. The marginal cost of producing garden hoses in the two states and the marginal revenue form producing garden hoses are given in the table below. From the perspective of the firm, what is the marginal cost of the 5th garden hose? (Answer is 5) Please show work.

California Ohio

Qc    MCc Qo MCo Qc+o MR

1 2 1 3 1 24

2 3 2 4 2 20

3 5 3 6 3 16

4 9 4 8 4 12

5 16 5 12 5 8

6 24 6 17 6 4

Answer 1

First of all I have tabulated the information provided in the question refer the attached picture

The same firm is producing the product.

Refer the above table

The marginal cost of producing 1st unit is $ 2

The firm produces next two units at a marginal cost of $;3

Then produces next unit at a marginal cost of $ 4

Next unit is produced at a marginal cost of $ 5.

Refer the bold letters in the above table.

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