If a Firm Estimates That Its Costs Will Fall by 10

question 304

Multiple Choice

If a firm estimates that its costs will fall by 10 percent each time volume doubles for its product, then the cost of the l,000^th unit produced and sold will be about 90 percent of the cost of the 500^th unit, and the 2,000^th unit will be 90 percent of the l,000^th unit. Therefore, if the cost of the 500^th unit is $100, the cost of the 4,000^th unit would be

• A)$0.
• B)$72.90.
• C)$81.00.
• D)$90.00.
• E)$100.00.

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