Use the Graph, Which Shows the Average Retail Prices of 1

question 79

Multiple Choice

Use the graph, which shows the average retail prices of 1 gallon of whole milk from 1996 through 2007. ​ ​
Approximate the lowest price of a gallon of whole milk shown in the graph.When did this occur?
​

• A)$2.97 / gal; 2001
• B)$3.17 / gal; 2002
• C)$3.07 / gal; 2003
• D)$2.67 / gal; 1997
• E)$3.87 / gal; 2004

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning income from these resources elsewhere.

Explicit Costs

Direct, out-of-pocket payments made for operations or production, such as wages, rent, and materials.

Average Fixed Cost

The constant expenses associated with production (expenses unaffected by output levels) divided by the volume of production.

Total Fixed Cost

The sum of all costs that do not change with the level of output or activity over a short period, such as rent, salaries, and equipment maintenance costs.