The table given below shows the total fixed and variable costs of a firm.Table 8.3

-Refer to Table 8.3. At what level of output does the average total cost starts increasing?
A)1 unit
B)6 units
C)5 units
D)7 units
E)4 units

Question

The table given below shows the total fixed and variable costs of a firm.Table 8.3
 
-Refer to Table 8.3. At what level of output does the average total cost starts increasing?
A)1 unit 
B)6 units 
C)5 units 
D)7 units 
E)4 units

Quizplus · Accepted Answer

Average total cost (ATC) starts increasing when the marginal cost (MC) is greater than the ATC. This typically occurs when economies of scale are no longer being realized, and the firm begins to experience diseconomies of scale. Without the specific data from Table 8.3, the general principle is that ATC starts to increase when additional units of output cause the cost per unit to go up, which usually happens after the firm has expanded production beyond its most efficient scale.

The Table Given Below Shows the Total Fixed and Variable