The Total Cost of Producing One Unit Is $50

question 98

Multiple Choice

The total cost of producing one unit is $50.The total cost of producing two units is $75.At a production level of two units,the cost function exhibits

• A) economies of scale.
• B) rising average costs.
• C) increasing marginal costs.
• D) constant returns to scale.

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Definitions:

Additional Revenue

The extra or incremental income received from selling one more unit of a product or service.

Input Hired

Resources or factors of production, such as labor, raw materials, and capital, employed in the creation of goods and services.

Complements in Production

Goods that are produced together in the production process; an increase in the production of one leads to an increase in the production of the other.

Wage

The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee for their labor.