At an Output of 17,ATC Is $20 and MC Is

question 302

Multiple Choice

At an output of 17,ATC is $20 and MC is $17.At an output of 18,ATC is $20.20 and MC is $21.We may conclude that the output at which the firm produces at peak efficiency is

• A)less than 17.
• B)17.
• C)between 17 and 18.
• D)18.
• E)more than 18.

---

Definitions:

Production Possibilities Frontier

A graphical representation that shows the maximum combination of goods and services that can be produced with a fixed amount of resources.

Rate Of Trade-off

The rate at which one factor must be decreased in order to increase another factor, commonly used in the context of opportunity cost.

Resources

Assets or inputs used in the production of goods and services, such as labor, capital, and natural resources.

Opportunity Cost

The loss incurred by rejecting the immediate best alternative when arriving at a decision.