Table 74 Table 74 Shows the Short-Run Cost Data of a Perfectly Competitive

question 235

Multiple Choice

Table 7.4
$$\begin{array} { | c | c | c | c | } \hline \text { Quantity } & \begin{array} { c } \text { Average } \\\text { Fixed Cost }\end{array} & \begin{array} { c } \text { Average } \\\text { Variable Cost }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost }\end{array} \\\hline 20 & \$ 40 & \$ 18 & \$ 18 \\\hline 40 & 20 & 14 & 10 \\\hline 60 & 13.1 & 16 & 20 \\\hline 80 & 10 & 22 & 40 \\\hline 100 & 8 & 30 & 62 \\\hline 120 & 6.61 & 40 & 90 \\\hline\end{array}$$ Table 7.4 shows the short-run cost data of a perfectly competitive firm. Assume that output can only be increased in batches of 20 units.
-Refer to Table 7.4.If the market price is $45,how many units will the firm produce?

• A) 60 units
• B) 80 units
• C) 100 units
• D) 120 units

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