-Refer to the Figure Above

question 17

Multiple Choice

-Refer to the figure above. At the 50th unit of action, which of the following is true?

• A)Marginal benefit exceeds marginal cost.
• B)Marginal cost exceeds marginal benefit.
• C)Total gains are maximized.
• D)Total losses are minimized.

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Definitions:

Output

The total amount of goods or services produced by a firm, industry, or economy within a given period.

Short-Run Supply

The supply of goods that varies with changes in price in the short term, where at least one factor of production is fixed.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average cost of production per unit when fixed costs are excluded.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.