Use the following table to answer questions a-c
Output (Q): 0 1 2 3 4 5 6
Total Cost (TC): $36 $45 $52 $61 $74 $91 $110
a. What is the average fixed cost of producing 4 units of output?
b. What is the marginal cost of producing the third unit of output?
c. At what level of output does the firm encounter diminishing marginal returns? How do you know?
a. $9
b. $9
c. Between 2 and 3 units of output. This is the point at which MC begins to increase.
You might also like to view...
Most studies of mineral abundance have assumed that
a. Resources are relatively smoothly distributed in the earth's crust b. Resources are unevenly distributed in the earth's crust c. Resource prices will continue to rise in the near future d. Economically recoverable reserves will decrease in the near future e. The economic supply of resources will remain fixed
The U.S. used high-pressure steam engines, whereas the British favored low-pressure engines. The reason for the American preference for high-pressure steam engines was that
(a) low-pressure steam engines, though more efficient, were complicated to build and operate and America lacked skilled labor compared to England. (b) the high-pressure steam engines used extravagant amounts of wood fuel. The U.S. abundance of wood compared to Europe made building high-pressure steam engines cheaper in the U.S. (c) Americans simply lagged behind technologically compared to England and continued to use the outdated high-pressure steam engines. (d) England had patents on the superior low-pressure steam engine and would not allow other nations to use the technology.