Table 18-12 The Table Displays Data for a Small, Competitive, Profit-Maximizing Firm

question 394

Multiple Choice

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week.
-Refer to Table 18-12. Let Q represent the number of boxes of envelopes produced per week. Which of the following points is not a point on this firm's production function?

• A)(L = 2, Q = 240).
• B)(L = 3, Q = 332).
• C)(L = 4, Q = 408).
• D)(L = 5, Q = 494).

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Definitions:

Average Fixed Cost (AFC)

A firm’s total fixed cost divided by output (the quantity of product produced).

Marginal Cost (MC)

The extra (additional) cost of producing 1 more unit of output; equal to the change in total cost divided by the change in output (and, in the short run, to the change in total variable cost divided by the change in output).

Total Cost

The sum of all costs incurred by a business in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The additional cost incurred from producing one more unit of a good or service.