A Firm Estimates That When Output Is 10, Its Total

question 41

Multiple Choice

A firm estimates that when output is 10, its total costs are $900. It also finds that when output is 11, its total costs are $920. The marginal cost of the eleventh unit of output is:

• A) $1.
• B) $20.
• C) $90.
• D) $900.
• E) $920.

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Definitions:

Government Interference

Actions taken by government to affect decisions made by individuals, companies, or other governments, which can include regulations, laws, and taxes.

Market Equilibrium

A situation where, at the current price, the quantity of goods supplied equals the quantity of goods demanded, leading to a stable market condition.

Optimal Allocation

The most efficient distribution of resources and services, maximizing the benefit from their use.

External Costs

Costs not reflected in the market price of goods or services, borne by a third party or society at large.