Refer to the Data Provided in Table 9 -Refer to Table 9

question 174

Multiple Choice

Refer to the data provided in Table 9.3 below to answer the following question(s) .
Table 9.3
$$\begin{array} { c c c c c c c } \text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \\\hline 0 & \$ 100 & \$ 0 & \$ 100 & - - & - - & - - \\\hline 1 & 100 & 40 & 140 & 40 & 40 & 140 \\\hline 2 & 100 & 60 & 160 & 20 & 30 & 80 \\\hline 3 & 100 & 90 & 190 & 30 & 30 & 63.33 \\\hline 4 & 100 & 124 & 224 & 34 & 31 & 56 \\\hline 5 & 100 & 180 & 280 & 56 & 36 & 56 \\\hline 6 & 100 & 264 & 364 & 84 & 44 & 60.67 \\\hline 7 & 100 & 372 & 472 & 108 & & 67.43 \\\hline\end{array}$$
-Refer to Table 9.3. If the market price is $30, then this firm will maximize profits by producing ________ units of output.

• A) three
• B) four
• C) five
• D) six

---

Definitions:

Economies of Scale

Describe the cost advantages that enterprises obtain due to the scale of their operations, typically resulting in reduced costs per unit with increased output.

Long-run Average Total Cost

The average cost per unit of output when all inputs, even physical capital, are adjustable, over a sufficient time period.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, characterized by a reduction in average cost per unit when output is increased.

Diseconomies of Scale

The phenomenon where production costs per unit increase as the volume of output increases.