Consider one last time the case of Shane, who is considering selling his boat. As a reminder:

Shane is considering selling his boat. He paid $5200 for the boat two years ago, and in the first year he owned it he incurred $600 in repairs and improvements, while in the second year he paid $200 for the same.

Shane has definitely decided to sell the boat. What he's not sure about is whether he should do $500 more in repairs before he sells it. He does some research and feels sure that if he does the repairs before selling he can get $4800 for the boat. If he doesn't, he can get $4400 for it.

Shane _______ repair the boat before selling it because marginal cost ____________.

A should not; is greater than marginal benefit

B should not; is less than marginal benefit

C should; is less than marginal benefit

D should; is greater than marginal benefit

Answer rating: 100% (QA)

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