Suppose Cyd Knows the Average Total Cost of Producing Nine

question 113

Multiple Choice

Suppose Cyd knows the average total cost of producing nine scones is $5,while the average total cost of producing 10 scones is $5.20.What is the marginal cost of the tenth scone?

• A) $7.00
• B) $5.20
• C) $0.20
• D) $5.00

---

Definitions:

Ratio

A quantitative relationship between two numbers, often used in financial analysis to assess performance, financial health, and operational efficiency.

Income Statement

A financial report that shows a company's revenues and expenses over a specified period of time, resulting in net profit or loss.

Vertical Analysis

A technique in analyzing financial statements, where each item in the primary categories of assets, liabilities, and equity on a balance sheet is expressed as a ratio of the overall category total.

Solvency Analysis

An assessment of a company's ability to meet its long-term financial obligations and continue its operations.