When the Average Total Cost Is $16 and the Total

question 66

Multiple Choice

When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is

• A)impossible to determine with the information given.
• B)12,800.
• C)784.
• D)50.

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Definitions:

Cost Function

Function relating cost of production to level of output and other variables that the firm can control.

Profit Sharing

A company policy or agreement that distributes a portion of its profits among employees, typically based on their performance or salary.

Total Cost Function

A mathematical representation of how a firm's total cost varies with its level of output.

Optimal Output Level

The quantity of production that results in the highest possible profit for the firm, considering the cost of resources and the revenue from sales.