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.

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Definitions:

Planning Stage

An initial phase in a project or process where objectives are defined, and strategies are developed to achieve them.

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A method of evaluating a product or system by testing it with real users to gauge how easy and efficient it is to use.

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An estimate of the costs, resources, and revenues related to completing a specific project within a defined time frame.

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