If the ATC of the 20th unit is $35, then: A) the MC is increasing between 10 and 20 units; B) the ATC is falling between 20 and 30 units; C) the MC is falling between 20 and 30 units; D) the AVC is falling between 20 and 30 units; E) the ATC is rising between 20 and 30 units.

If the ATC of the 20th unit is $35, then: A) the MC is increasing between 10 and 20 units; B) the ATC is falling between 20 and 30 units; C) the MC is falling between 20 and 30 units; D) the AVC is falling between 20 and 30 units; E) the ATC is rising between 20 and 30 units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the ATC of the 20th unit is $35, then:

A) the MC is increasing between 10 and 20 units;
B) the ATC is falling between 20 and 30 units;
C) the MC is falling between 20 and 30 units;
D) the AVC is falling between 20 and 30 units;
E) the ATC is rising between 20 and 30 units.

Table: Variable Costs for Lawns
Quantity of lawns
Variable costs
$0
10
100
20
300
30
500
40
1,100
50
1,800

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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