In figure 9.2 what is the marginal cost at a quality of 120 units?A.) 35B 40C 55D 60E 4,800 ## Cost Curves of a FirmThe figure below illustrates the cost curves of a firm.### Figure 9.2: Cost Curves**Graph Description:**- **Axes:** - The vertical axis represents Cost (in dollars). - The horizontal axis represents Quantity.- **Cost Curves:** - **MC (Marginal Cost):** This curve is upward-sloping, indicating the additional cost of producing one more unit. - **ATC (Average Total Cost):** This curve is U-shaped, representing the average cost per unit, which is initially high, decreases, and then rises again due to varying efficiencies. - **AVC (Average Variable Cost):** This curve is also U-shaped but below the ATC curve. It reflects the variable costs per unit and follows a similar pattern to ATC.**Definitions:**- **ATC (Average Total Cost):** Total cost divided by the quantity of output produced.- **AVC (Average Variable Cost):** Variable cost divided by the quantity of output produced.- **MC (Marginal Cost):** The cost of producing one additional unit of output.These curves are essential for understanding the firm's cost structure and decision-making regarding production levels.

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In figure 9.2 what is the marginal cost at a quality of 120 units? A.) 35 B 40 C 55 D 60 E 4,800

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A: Answer to the question is as follows :

Question

In figure 9.2 what is the marginal cost at a quality of 120 units?

A.) 35

B 40

C 55

D 60

E 4,800

## Cost Curves of a Firm

The figure below illustrates the cost curves of a firm.

### Figure 9.2: Cost Curves

**Graph Description:**
- **Axes:**
- The vertical axis represents Cost (in dollars).
- The horizontal axis represents Quantity.

- **Cost Curves:**
- **MC (Marginal Cost):** This curve is upward-sloping, indicating the additional cost of producing one more unit.
- **ATC (Average Total Cost):** This curve is U-shaped, representing the average cost per unit, which is initially high, decreases, and then rises again due to varying efficiencies.
- **AVC (Average Variable Cost):** This curve is also U-shaped but below the ATC curve. It reflects the variable costs per unit and follows a similar pattern to ATC.

**Definitions:**
- **ATC (Average Total Cost):** Total cost divided by the quantity of output produced.
- **AVC (Average Variable Cost):** Variable cost divided by the quantity of output produced.
- **MC (Marginal Cost):** The cost of producing one additional unit of output.

These curves are essential for understanding the firm's cost structure and decision-making regarding production levels.

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Cost, revenue, and profit are in dollars and x is the number of units. Suppose that the marginal revenue for a product is MR = 1800 and the marginal cost is MC = 90Vx + 4, with a fixed cost of $600. (a) Find the profit or loss from the production and sale of 5 units. There is a -Select-- | of $ (b) How many units will result in a maximum profit? units
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O O Price (dollars) 160 120 8 40 0 2 4 Quantity According to the figure above, the total cost of producing 5 units is $24 $80 $8 $120 $40
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