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e. What happens to the cost per person if the number of people changes: - From 1 to 3 ? - From 2 to 6 ? - From 3 to 9 ?

Ask by Ramirez Ortega. in South Africa
Jan 23,2025

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When the number of people increases from 1 to 3, 2 to 6, or 3 to 9, the cost per person decreases to one-third of the original cost.

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The Deep Dive

When the number of people increases from 1 to 3, the cost per person decreases significantly. For instance, if the total cost was $30 for one person, with three people sharing that amount, the cost per person would drop to just $10! This concept beautifully illustrates economies of scale, where costs spread out over more participants lead to lower individual expenses. When you jump from 2 to 6 people, the cost per person continues to fall as the total cost remains constant. Using the same example, if the total cost is $60, with six people, each individual now pays only $10—a great incentive for group outings! However, it’s essential to keep track of the total cost, as expenses might not grow proportionally if new participants lead to added costs.

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