A planned freeway connecting two cities was originallybudgeted to cost $200 mill

Question

A planned freeway connecting two cities was originallybudgeted to cost $200 million. After building part of the system ata cost of $150 million, the government realised that the total costof the system would be $260 million, not $200 million. At thispoint the marginal cost of completing the freeway is best estimatedas a) $60 million b) $110 million c) none of the above I think the answer is b, is it correct? Because if they decideto complete the freeway, then they have to pay $110 million.Thanks. A planned freeway connecting two cities was originallybudgeted to cost $200 million. After building part of the system ata cost of $150 million, the government realised that the total costof the system would be $260 million, not $200 million. At thispoint the marginal cost of completing the freeway is best estimatedas a) $60 million b) $110 million c) none of the above I think the answer is b, is it correct? Because if they decideto complete the freeway, then they have to pay $110 million.Thanks.

Explanation / Answer

hmmm, I thought marginal cost is the change in total cost, so wouldn't that be 260-200=60? A

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