A basketball manufacturer is considering a number of options for its new factory. Given the following costs and benefits of the four different factory configurations, what are the marginal costs and benefits of the Extra Large configuration relative to the Large configuration?

Total Cost Total Benefit Configuration A (Small) $45,000 70,000 Configuration B (Medium) 120,000 170,000 Configuration C (Large) 240,000 300,000 Configuration D (Extra Large) 400,000 420,000

a. MCof $160,000 and Marginal Benefit of $120,000

b. MC of $400,000 and Marginal Benefit of $420,000

c. MC of $120,000 and Marginal Benefit of $120,000

d. MC of $160,000 and Marginal Benefit of $220,00

Answer rating: 100% (QA)

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