If the 15th Unit of Output Has a Marginal Cost

question 292

Multiple Choice

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23, what will happen to the average cost of production if the 15th unit is produced?

• A)Average cost increases as more is produced.
• B)Average cost will fall.
• C)Average cost could increase or decrease depending on what happens to variable cost.
• D)Average cost could increase or decrease depending on what happens to fixed cost.