A firm is producing 1,000 units at a total cost of $8,000. If it were to increas
ID: 1128293 • Letter: A
Question
A firm is producing 1,000 units at a total cost of $8,000. If it were to increase production to 1,001 units, its total cost would rise to $8,005. What does this information tell you about the firm?
Marginal cost is $8, and average variable cost is $5.
Marginal cost is $5, and average variable cost is $8.
Marginal cost is $8, and average total cost is $5.
Marginal cost is $5, and average total cost is $8.
Marginal cost is $8, and average variable cost is $5.
Marginal cost is $5, and average variable cost is $8.
Marginal cost is $8, and average total cost is $5.
Marginal cost is $5, and average total cost is $8.
Explanation / Answer
Answer
ATC=TC/Q
MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p
ATC=8000/1000=8
MC=8005-8000=5
Marginal cost is $5, and the average total cost is $8.
option fourth
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