Marginal Cost of Housing. When the price of a standard urban loft increases from $120,000 to $135,000, a building company increases its production of lofts from 20 lofts per year to 21 lofts per year.
What does this increase in the price of housing reveal about the cost of producing housing?
A. The marginal benefit of the 21st loft is just under $135,000.
B. The building company will only produce the 21st loft if the marginal benefit from producing it exceeds the marginal cost.
C. The marginal cost of the 21st loft produced is greater than $135,000.
D. All of the above are correct.