120 . Refer to the above data. At 5 units of output average fixed cost, average
ID: 1098285 • Letter: 1
Question
120. Refer to the above data. At 5 units of output average fixed cost, average variable cost, and average total cost are:
A. $10, $60, and $70 respectively.
B. $50, $40, and $90 respectively.
C. $10, $70, and $80 respectively.
D. $5, $25, and $30 respectively.
121. Refer to the above data. The marginal cost of the fifth unit of output is:
A. $80.
B. $90.
C. $50.
D. $20.
122. Refer to the above data. If product price is $75, the firm will produce:
A. 3 units of output.
B. 4 units of output.
C. 5 units of output.
D. 6 units of output.
123. Refer to the above data. Given the $75 product price, at its optimal output the firm will:
A. realize a $25 economic profit.
B. realize a $30 economic profit.
C. incur a $25 loss.
D. realize a $30 loss.
how are these the answers?
Answer the question on the basis of the following cost data for a purely competitive seller:Explanation / Answer
120. $10, $60, and $70 respectively
reason: average fixed cost = 50/5 = 10
average variable cost = 300/5 = 60
average total cost = 350/5 = 70
121.$80.
reason: 350-270 =80
122.4 units of output.
reason:
since marginal cost for 5th unit is 80 which is greater than its price that is 75 hence firm will produce 4 units
123.realize a $30 economic profit
reason:
75* 4 = 300
300-270 = $30
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