If the firm sells 5 units at a price of $30 each, then the Quantity Cost Fixed Total Average (in Costs Costs Total Costs 0 1 2 3 4 so dollars) (in (in (in dollars dollars) dollars) per unit) 6 0 15 40 40 40 55 55 35 40 75 5 125 40 90 40 60 40 100 33.3 .. 37.5 130 32.5 160 40 200 165 33 marginal unit produced 33.3 Average Variable Costs (in dollars per unit) : 15 17.5 20 22.5 25 26.6 Marginal Costs (in dollars per unit) : 15 20 25 30 35 40 is subtracting from profits. the purchase price is higher than the average cost. the purchase price is the same as the average cost. is adding to profits.
If the firm sells 5 units at a price of $30 each, then the Quantity Cost Fixed Total Average (in Costs Costs Total Costs 0 1 2 3 4 so dollars) (in (in (in dollars dollars) dollars) per unit) 6 0 15 40 40 40 55 55 35 40 75 5 125 40 90 40 60 40 100 33.3 .. 37.5 130 32.5 160 40 200 165 33 marginal unit produced 33.3 Average Variable Costs (in dollars per unit) : 15 17.5 20 22.5 25 26.6 Marginal Costs (in dollars per unit) : 15 20 25 30 35 40 is subtracting from profits. the purchase price is higher than the average cost. the purchase price is the same as the average cost. is adding to profits.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 9SQP
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