Tankao Makes Earbuds for Mobile Devices

question 296

Multiple Choice

Tankao makes earbuds for mobile devices.When Tankao produces 20 sets of earbuds,its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

• A)marginal cost is less than $3 per set.
• B)marginal cost is $3 per set.
• C)average fixed cost is $3 per set.
• D)marginal cost is equal to its average fixed cost.

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Definitions:

Bowed Out

A description usually of production possibilities frontier that shows increasing opportunity costs.

Command Economy

An economic system in which the government or central authority makes all decisions about the production and distribution of goods and services.

Centralized

A system or organization where decision-making and administrative processes are concentrated at a single point or center.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as the percentage increase in real GDP.