Question

Assume school Tuition is based on the number of credit hours up to a point of being a full-time student. If a student takes 12 credit hours per semester and pays $18,000, then decides to take an additional 3 credit hour course, tuition cost is the same - $18,000. In this case, your marginal cost of taking the additional course is:

Answer 1

Marginal cost = Change in total cost/ change in output

Here credit hours can be considered as output and and payment can be considered as total cost

Initial total cost or fee payment= 18000

New total cost or fee payment =18000

Change in total cost or semester fee= 18000-18000= 0

Initial output or or number of credit hours = 12

New level of output or number of credit hours = 12+3=15

Change in output or total credit hours 15-12=3

MC =∆ total cost/ ∆ output

= 0/ 3 =0

Marginal cost of is taking the additional course is zero.