Question 36
HardOriginal questionA firm's short-run total cost schedule is given.
| Output (units) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|---|
| Total cost (₹) | 60 | 90 | 110 | 126 | 140 | 160 | 192 | 242 |
At what output is average variable cost lowest, and how does MC compare with AVC there?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
AVC: 30, 25, 22, 20, 20, 22, 26. The lowest is ₹20, at 4 and 5 units.
MC of the 5th unit is ₹20 = AVC: MC meets AVC at its minimum.
- Concept
- MC meets AVC at its minimum
- Typical timeTypical
- 100 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Cost Curves, at your own pace.