Find the Average Rate of Change Illustrated in the Graph

question 10

Multiple Choice

Find the average rate of change illustrated in the graph.
-Northwest Molded molds plastic handles which cost $0.20 per handle to mold. The fixed cost to run the molding machine is $3906 per week. If the company sells the handles for $2.20 each, how many
Handles must be molded and sold weekly to break even?

• A) 1627 handles
• B) 1302 handles
• C) 19,530 handles
• D) 1953 handles

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Definitions:

Returns to Scale

The rate at which output changes if the scale of all inputs is changed by the same proportion.

Output Level

The amount of product or service that is produced by a company or an economy at a given time.

Isoquants

Curves representing combinations of inputs which yield the same level of output in production theory, illustrating technical substitution and factor combinations.

MRTS

Marginal Rate of Technical Substitution; the rate at which one input must increase when another input decreases to keep output constant.