The Average Variable Cost of Producing 250 Sundaes Is $5

question 290

Multiple Choice

The average variable cost of producing 250 sundaes is $5. At this level of output, average variable cost is minimized. Which of the following statements is true?

• A) Marginal cost of the 251st sundae is $1,250.
• B) Average total cost is minimized at an output greater than 250 sundaes.
• C) Average fixed cost is minimized at an output less than 250 sundaes.
• D) Total cost of producing 250 sundaes is $1,250.