b. an adverse ettect on a bystander who is compensated by the person who causes
ID: 1127673 • Letter: B
Question
b. an adverse ettect on a bystander who is compensated by the person who causes the ettect c. an adverse effect on a bystander who is not compensated by the person who causes the effecet d. a beneficial effect on a bystander who pays the person who causes the effect. 54. Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that the average total cost when 5 units of output are produced is S30, and the marginal cost of the sixth unit of output is S60. What is the average total cost when six units are produced? a. $30 b. $25 c. $10 d s35Explanation / Answer
(54) (d)
Total cost for 5 units = Average total cost (ATC) x Output = $30 x 5 = $150
Total cost for 6 units = Total cost for 5 units + Marginal cost of 6th unit = $150 + $60 = $210
ATC for 6th unit = Total cost for 6 units / 6 = $210 / 6 = $35
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