Scenario 14-3
Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for $20.
-Refer to Scenario 14-3. At Q=499, the firm's total costs equal
A)$5,983.
B)$5,988.
C)$5,995.
D)$5,999.

Question

Quizplus · Accepted Answer

The total cost at Q=500 is 500 units * $12 = $6,000. The marginal cost of the 500th unit is $17, so the total cost at Q=499 is $6,000 - $17 = $5,983.

Scenario 14-3 Suppose a Certain Competitive Firm Is Producing Q=500 Units of Units