Table 14-10
Suppose that a firm in a competitive market faces the following revenues and costs:
-Refer to Table 14-10. Which level of production in the table has the lowest average variable cost?
A)1 unit
B)2 units
C)3 units
D)4 units

Question

Table 14-10
Suppose that a firm in a competitive market faces the following revenues and costs: 
-Refer to Table 14-10. Which level of production in the table has the lowest average variable cost?
A)1 unit 
B)2 units 
C)3 units 
D)4 units

Quizplus · Accepted Answer

From the table, it can be seen that the average variable cost is lowest at 2 units of production, where it is $19.50. At 1 unit, the average variable cost is $22, at 3 units it is $20.33, and at 4 units it is $21.75. Therefore, the best choice for the lowest average variable cost is B, with 2 units of production.

Table 14-10 Suppose That a Firm in a Competitive Market Faces the Faces