$$\begin{array}{l}
\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Output } \
\text { (Units per Day) }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { (Dollars per Day) }
\end{array} \
\hline 0 & 16 \
\hline 1 & 30 \
\hline 2 & 42 \
\hline 3 & 58 \
\hline 4 & 78 \
\hline
\end{array}\
\text { Table 21.4 }
\end{array}$$ For the output levels in Table 21.4, the minimum of the average total cost curve occurs at a production rate of
A) 2 units per day.
B) 3 units per day.
C) 4 units per day.
D) Zero units per day.

Question

$$\begin{array}{l}
\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Output } \
\text { (Units per Day) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (Dollars per Day) }
\end{array} \
\hline 0 & 16 \
\hline 1 & 30 \
\hline 2 & 42 \
\hline 3 & 58 \
\hline 4 & 78 \
\hline
\end{array}\
\text { Table 21.4 }
\end{array}$$ For the output levels in Table 21.4, the minimum of the average total cost curve occurs at a production rate of
A) 2 units per day.
B) 3 units per day.
C) 4 units per day.
D) Zero units per day.

Quizplus · Accepted Answer

The average total cost is minimized at the output level where the average total cost (total cost divided by output) is the lowest. Calculating for each output level, 3 units per day has the lowest average total cost.

For the Output Levels in Table 21