Mr Hudson Notes That If He Produces 10 Pairs of Shoes

question 158

Multiple Choice

Mr. Hudson notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost is $8; if he produces 20 pairs of shoes per day, his MC is $15. What is his AFC when output is 20 pairs of shoes per day?

• A) $5
• B) $7
• C) $8
• D) $15

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Definitions:

Negotiating Skills

The abilities and techniques used to effectively persuade or influence others in order to reach a mutual agreement.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Opportunity Cost

The benefit that is missed or foregone when choosing one alternative over another.

Excess Capacity

A situation where a company's production facilities are capable of producing more than the demand for its products or services.