Pablo owns a record store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Pablo sold 1,200 records. If Pablo sells 1,250 records this year (50 more than last year) and his average total cost increases to $1.28 million, we know that the: a. average variable cost of selling records has decreased.
b. marginal cost of those 50 records is $80,000.
c. average fixed cost of selling records is unchanged.
d. marginal cost of those 50 records is $1.28 million.
e. average total cost of selling 1.250 records is $1,000.

b. marginal cost of those 50 records is $80,000.

Explanation:

The computation is shown below:

The average cost of selling 1,200 records is

= $1,200,000 ÷ 1,200

= $1,000

Now

The average total cost of selling 1,250 records is

= $1,280,000 ÷ 1,250

= $1,024

Now for the extra 50 records, the marginal cost is

= $1,280,000 - $1,200,000

= $80,000

Hence, the correct option is b.

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.