Asked by Ashley Fondeur on May 17, 2024
Verified
Answer the question on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10: Output ATC 1$40227329431538\begin{array} { c r } \text { Output } & \text { ATC } \\\hline 1 & \$ 40 \\2 & 27 \\3 & 29 \\4 & 31 \\5 & 38\end{array} Output 12345 ATC $4027293138 Refer to the data.The profit-maximizing level of output for this firm:
A) is 3.
B) is 4.
C) is 5.
D) cannot be determined from the information given.
Profit-Maximizing
The operational method a firm adopts to calculate the pricing and output that bring in the highest profit.
Average Total Costs
The total cost of production divided by the quantity of output produced, illustrating the cost per unit of output.
Total Fixed Costs
The total of all expenses that do not change with the amount of production or output.
- Examine cost figures to gain insights into the movements of cost curves, specifically, Average Total Cost (ATC) and Marginal Cost (MC) curves.
Verified Answer
RT
Reagan TownsendMay 19, 2024
Final Answer :
D
Explanation :
The profit-maximizing level of output cannot be determined solely from the average total costs (ATC) without information on the selling price per unit or the marginal costs and revenues.
Learning Objectives
- Examine cost figures to gain insights into the movements of cost curves, specifically, Average Total Cost (ATC) and Marginal Cost (MC) curves.