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

Quizplus · Accepted Answer

To find the minimum of the average variable cost (AVC), first, calculate the variable cost (VC) at each output level by subtracting the total cost at 0 units (fixed cost) from the total cost at each output level. Then, divide the VC by the output level to get the AVC for each level. The AVC decreases from 14 (at 1 unit) to 13 (at 2 units) and then increases, indicating the minimum AVC occurs at 2 units per day.

For the Output Levels in Table 21