Fixed Costs Tots Fixed Cost $5,000 150 200 Quantity of output 28) Refer to Figur

Question

Fixed Costs Tots Fixed Cost $5,000 150 200 Quantity of output 28) Refer to Figure 11-4. What happers to the average fixed cost of production when the firm increases 200P 28) A) It falls 8) It could rise or fall depending on what happens to total cost C) It rises. b) It remains constant 29) If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed cost of production if it expands output to 25 units 29) A) $300 B) $15 C) $12 D) It is impossible to determine without additional information 30) 30) Marginal cost A) is the difference between total cost and total variable cost. B) declines continuously as output increases. C) rises for a time but then begins to decline when diminishing returns set in D) equals both average variable cost and averoge total cost at their respective minimums

Explanation / Answer

Ans

1 it falls as same total is divided by higher and higher quantity

2 fixed cost=total cost - variable cost=1000-700=300

So AFc =300/25=12

3 D is right. It meets them at lowest point of these curves

4 A as ATC and Mc keep declining as more output is produced

5 =9.4-6.5/70000-50000=2900000/20000=145

6 B is right As marginal product rises marginal cost falls and vice vice versa was required to answer only 4 parts according to Chegg policy but still answered all Please please like answer

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