If variable cost at each output level doubles,then _____
A)average total cost doubles.
B)average fixed cost doubles.
C)marginal cost remains unchanged.
D)marginal cost doubles.
E)marginal cost less than doubles.

Question

Quizplus · Accepted Answer

If variable cost at each output level doubles, then the cost of producing an additional unit of output (i.e., marginal cost) will also double. This is because the cost of producing one additional unit includes only the variable cost. Fixed costs remain the same regardless of the level of output. Therefore, since only the variable costs are affected by the doubling, the marginal cost will double too.

If Variable Cost at Each Output Level Doubles,then _____