-Refer to the Table Above

question 126

Multiple Choice

-Refer to the table above. If A = 10 and B = 8, which of the following is true?

• A)The firm should buy more of Input 1 and less of Inputs 2 and 3.
• B)The firm should buy more of Input 2 and less of Inputs 1 and 3.
• C)The firm should buy more of Input 3 and less of Inputs 1 and 2.
• D)The firm is minimizing costs.

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced.

Marginal Cost

The increase in expense from creating one more unit of a product or service.

Total Cost

The total cost of production, encompassing both variable and fixed expenses.

Average Cost

The total cost of production divided by the number of goods produced, representing the cost on average of producing each unit of output.