**Question 22:** Suppose an artist put on 5 concerts in Korea last month for an average total cost of $1 million each. It considered doing 6 concerts for an average total cost of $0.9 million but decided not to. What would have been the marginal cost of the 6th concert? $___ million**Explanation:**This question involves calculating the marginal cost of an additional concert. The marginal cost in economics is the cost of producing one more unit of a good or service—in this case, an additional concert.1. **Calculate Total Cost of 5 Concerts:** - The average cost for the first 5 concerts is $1 million each. - Total cost for 5 concerts = 5 concerts × $1 million/concert = $5 million2. **Calculate Total Cost of 6 Concerts:** - The average cost for 6 concerts would have been $0.9 million each. - Total cost for 6 concerts = 6 concerts × $0.9 million/concert = $5.4 million3. **Determine Marginal Cost of 6th Concert:** - Marginal cost of the 6th concert = Total cost of 6 concerts - Total cost of 5 concerts - Marginal cost = $5.4 million - $5 million - Marginal cost = $0.4 millionTherefore, the marginal cost of the 6th concert would have been $0.4 million.

Average Total Cost(ATC) is the total cost divided the total quantity. ATC=total costtotal quantity…

22. Suppose an artist put on 5 concerts in Korea last month for an average total cost of $1 million each. It considered doing 6 concerts for an average total cost of $0.9 million but decided not to. What would have been the marginal cost of the 6th concert? $ million

22. Suppose an artist put on 5 concerts in Korea last month for an average total cost of $1 million each. It considered doing 6 concerts for an average total cost of $0.9 million but decided not to. What would have been the marginal cost of the 6th concert? $ million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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