The marginal cost of producing the first unit is A. $10 B. $16 C. $5 D. $30 E. $

Question

The marginal cost of producing the first unit is
A. $10
B. $16
C. $5
D. $30
E. $20

It would not pay a firm to produce anything in the short run if price were

A. Equal to marginal cost and above the average variable cost
B. below marginal cost
C. above average total cost
D. equal to total revenue divided by output
E. below average variable cost

To earn ecnomic profit, a monoplist must charge a price that

A. is great than demad
B. is below marginal cost
C. maximizes total output
D. equals marginal revenue
E. is above average cost

Units of output Total Cost Average fixed cost Average Variable cost Marginal Cost 0 1 $10 2 $46 3 $20 4 $18 5 $130 $4

Explanation / Answer

A $10

B Equal to marginal cost and above the average variable cost

C is above average cost

Units of output Total Cost Average fixed cost Average Variable cost Marginal Cost 0 20 - - - 1 30 20 $10 10 2 $46 10 13 16 3 66 6.66666667 15.33333 $20 4 92 5 $18 26 5 $130 $4 22 38

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