The table below shows how total donations average donations

The table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.

The marginal cost of the 4th employee is:

a. $9,500.

b. $10,750.

c. $11,000.

d. $13,000.

Total Number of Employees Donations Donations Labor Costs Labor Costs Total Average Average $30.000 $42.426 $8,000 S17,000 $27,000 $17.321 S60.000 $9,500 $13.416 $50,000

Solution

Solution: 11,000

Working:

Total labor cost at fourth employee = 9500*4 = 38,000

Marginal cost = 38,000 - total labor cost at third employee

= 38,000 - 27,000 = 11,000