​Tony's Taco Truck Has an Average Variable Cost of $1

question 478

Multiple Choice

​Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos) . We can conclude that the average variable cost of producing 51 tacos is

• A)​higher than $1.50.
• B)​lower than $1.50.
• C)​equal to $1.50.
• D)​either higher or lower than $1.50 depending on the direction of the marginal cost curve.

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