Suppose that the marginal cost of producing a pound of cereal is $2, irrespective of the level of output, but there are also some fixed costs of production. Which of the following statements iscorrect?O The total cost curve is an upward-sloping straight line through the originO The average cost curve is U-shapedThe marginal cost curve is a horizontal straight lineO The marginal cost curve intersects the average cost curve at its minimum point

Marginal cost is in addition to total cost because of producing one more unit of output. Average…

Suppose that the marginal cost of producing a pound of cereal is $2, irrespective of the level of output, but there are also some fixed costs of production. Which of the following statements is correct? The total cost curve is an upward-sloping straight line through the origin O The average cost curve is U-shaped The marginal cost curve is a horizontal straight line O The marginal cost curve intersects the average cost curve at its minimum point

Suppose that the marginal cost of producing a pound of cereal is $2, irrespective of the level of output, but there are also some fixed costs of production. Which of the following statements is correct? The total cost curve is an upward-sloping straight line through the origin O The average cost curve is U-shaped The marginal cost curve is a horizontal straight line O The marginal cost curve intersects the average cost curve at its minimum point

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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K A cereal factory has weekly fixed costs of $22,000. It costs $1.26 to produce each box of cereal. A box of cereal sells for $4.06. Find the rule of the cost function c(x) that gives the total weekly cost of producing x boxes of cereal. OA. c(x)=1.26x OB. c(x)=22,000+ 1.26x OC. c(x)=22,000 +4.06x OD. c(x)=22,000+ 2.8x
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The average fixed cost curve will never intersect with either the horizontal or vertical axis. graph. There must be proper positioning of the Average Total Cost curve and Average Variable Cost curve. graph. The Average Total Cost curve and Average Variable Cost curve must not touch (in between is average fixed costs – which can never be zero). graph.