12 of 45 10 complete This Test 45 pts possible This Question

12 of 45 (10 complete) This Test: 45 pts possible This Question: 1 pt Assume that a firm wants to set up a factory. It has four different options. The rent of the factory in the four different locations and the time taken to transport the product The opportunity cost of time is $10 per hour. Monthly Commuting Time Monthly Rent ($) 2,060 2,100 2,300 2500 Factory Location 30 25 Far Close Close decides to choose factory \"Far\" over factory Very Far? Refer to the table above. What is the marginal opportunity cost of transporting products to the market if the firm O A. $50 ??,-$50 O c. $150 O D. $100 Click to select your answer. is the way that we implement optimization in differences. Marginal analysis is one of the most important concepts in about optimizing

Solution

If the firm chooses Far over very far, then the Monthly commuting time has been reduced by 5 hours. The opportunity cost of time is $10 per hour. Thus, the marginal opportunity cost of transporting products to the market if the firm decides to choose Far over Far , is -$50.

Option B.