A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:
A)$4
B)$5
C)$6
D)$8
E)none of the above

Question

Quizplus · Accepted Answer

The total cost at 10 units is $60 (10 units * $6). The marginal cost of the 10th unit is $24, so the total cost at 9 units is $60 - $24 = $36. Therefore, the average total cost at 9 units is $36 / 9 = $4.

A Firm Is Currently Producing 10 Units of Output; Marginal