Suppose a car wash charges \$5 per car and the total cost of washing 23 cars is \$100, while the total cost of washing 24 cars is \$104. What is the marginal cost of washing the 24th car?

• A. \$104
• B. \$4
• C. \$204
• D. \$5

Answer: (B)

Verified step by step guidance

1. Identify the total cost of washing 23 cars, which is given as \$100, and the total cost of washing 24 cars, which is \$104.
2. Recall that the marginal cost (MC) is the additional cost incurred by producing one more unit of a good or service. In this case, it is the cost of washing the 24th car.
3. Calculate the marginal cost by subtracting the total cost of washing 23 cars from the total cost of washing 24 cars using the formula: \(MC = TC_{24} - TC_{23}\).
4. Substitute the given values into the formula: \(MC = 104 - 100\).
5. Interpret the result as the marginal cost of washing the 24th car, which represents the additional cost incurred for that extra car wash.