The Graph of a Company's Total Cost Function Is Shown

question 207

Multiple Choice

The graph of a company's total cost function is shown. Will the 201st item or the 501st item cost more to produce? ​ ​

• A)201st
• B)501st

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies.

Average Total Cost

The per unit cost of production, computed by dividing the total cost of production by the total quantity of output.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Marginal Costs

The expense incurred from manufacturing an extra unit of a product or service.