Figure 13-6 -Refer to Figure 13-6.Suppose Dell Finds the Relationship Between the the Relationship

question 248

Multiple Choice

Figure 13-6

-Refer to Figure 13-6.Suppose Dell finds the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced is as shown by Figure 13-2.Dell will maximize profits if it produces ________ notebook computers per month.

• A)100,000
• B)200,000
• C)300,000
• D)Not enough information is given to determine the profit-maximizing quantity.

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Definitions:

Lowest Cost Level

The point at which a business can produce its goods or services at the minimum possible cost.

Average Total

The sum of all the costs of production (fixed and variable) divided by the total quantity produced; often referred to as average total cost.

Marginal Cost Curve

A graphical representation showing how the marginal cost varies with the quantity of output produced, typically U-shaped due to economies and diseconomies of scale.

Average Fixed Cost Curve

A graphical representation depicting how the average fixed costs of production change with different output levels.