The Figure Shows the Graphs of the Cost and Revenue

question 20

Multiple Choice

The figure shows the graphs of the cost and revenue functions for a company that manufactures and sells binoculars. Use the information in the figure to answer the question.

-Is there a profit when 395 binoculars are produced?

• A)No
• B)Yes

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.

Fixed Cost

refers to expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Cell Phones

Portable electronic devices that allow for telecommunication over a network of stations without the need for a physical connection to a telephone line.

Output Level

The output level refers to the total amount of goods or services produced by an individual, firm, or economy at a given time.