Question

In: Economics

Refer to Exhibit 21-3. What level of output exhibits the lowest average total cost?



Variable Input



Fixed Input





Output

Marginal Physical Product of Variable Input

Total

Fixed Cost

Total

Variable Cost



Marginal Cost

(units)

(units)

(units)

(units)

(dollars)

(dollars)

(dollars)

0

1

0


$500

  $0


1

1

10

(A)

$500

$200

(F)

2

1

25

(B)

$500

$400

(G)

3

1

45

(C)

$500

$600

(H)

4

1

60

(D)

$500

$800

(I)

5

1

70

(E)

$500

$1000

(J)


Refer to Exhibit 21-3. What level of output exhibits the lowest average total cost?

a.45 units
b.25 units
c.10 units
d.70 units
e.60 units

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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