The Table Below Shows Output,marginal Cost,and Average Variable Cost for the Production

question 98

Multiple Choice

The table below shows output,marginal cost,and average variable cost for the production of pairs of shoes.All costs are in dollars.
TABLE 7-6
-Refer to Table 7-6.Suppose this firm is producing 210 pairs of shoes per time period and that the variable factor of production is labour.Which of the following statements best describes this firm's production?

• A)Additional units of labour employed will increase the average variable cost of producing shoes.
• B)Marginal cost is higher than average variable cost,so average product must be rising.
• C)Marginal cost is higher than average variable cost,so marginal product must be rising.
• D)Each additional unit of labour employed reduces the average variable cost of the pairs of shoes.
• E)The firm is producing below its capacity.

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Definitions:

Processing Department

A unit within a manufacturing facility where a specific type of production activity takes place.

Journal Entry

A record of the financial transactions entered into the accounting ledger of a business.

Production Process

The series of steps or actions taken to convert raw materials into finished goods or services.

Units Started

The number of units of product that have entered the production process but may not yet be completed.