The table below shows output, marginal cost, and average variable cost for the production of pairs of shoes. All costs are in dollars. $$\begin{array}{l}
\begin{array} { | l | l | l | }
\hline \text { Output } & \begin{array} { l }
\text { Marginal } \
\text { Cost }
\end{array} & \begin{array} { l }
\text { Average } \
\text { Variable Cost }
\end{array} \
\hline 50 & 60 & 140 \
\hline 70 & 45 & 115 \
\hline 90 & 35 & 95 \
\hline 110 & 30 & 80 \
\hline 130 & 35 & 65 \
\hline 150 & 60 & 60 \
\hline 170 & 105 & 65 \
\hline 190 & 180 & 75 \
\hline 210 & 230 & 90 \
\hline 230 & 290 & 110 \
\hline
\end{array}\
\text { TABLE 7- } 6
\end{array}$$
-Refer to Table 7- 6. Suppose there are no fixed costs. The firm reaches it's capacity level of output when its output is equal to units.
A) 110
B) 150
C) 210
D) 190
E) 50

Question

The table below shows output, marginal cost, and average variable cost for the production of pairs of shoes. All costs are in dollars. $$\begin{array}{l}
\begin{array} { | l | l | l | } 
\hline \text { Output } & \begin{array} { l } 
\text { Marginal } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Average } \
\text { Variable Cost }
\end{array} \
\hline 50 & 60 & 140 \
\hline 70 & 45 & 115 \
\hline 90 & 35 & 95 \
\hline 110 & 30 & 80 \
\hline 130 & 35 & 65 \
\hline 150 & 60 & 60 \
\hline 170 & 105 & 65 \
\hline 190 & 180 & 75 \
\hline 210 & 230 & 90 \
\hline 230 & 290 & 110 \
\hline
\end{array}\
\text { TABLE 7- } 6
\end{array}$$
-Refer to Table 7- 6. Suppose there are no fixed costs. The firm reaches it's capacity level of output when its output is equal to units.
A) 110
B) 150
C) 210
D) 190
E) 50

Quizplus · Accepted Answer

The firm reaches its capacity level of output when the marginal cost starts to increase after reaching its minimum. In the table, the marginal cost is lowest at 110 units and starts increasing after 150 units, indicating that 150 units is the capacity level of output.

The Table Below Shows Output, Marginal Cost, and Average Variable