If Total Cost Is $1,000 When Output Is Zero, and Total

question 59

Multiple Choice

If total cost is $1,000 when output is zero, and total cost is $1,200 when output is one, and total cost is $1,500 when output is two, then which of the following is true ?

• A) Total fixed cost is $1,500.
• B) The marginal cost of producing the first unit of output is $1,200.
• C) The marginal cost of producing the second unit of output is $300.
• D) The average fixed cost is $750 when two units of output are produced.

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