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Output Total Cost 0 $400 1 $900 2 $1,300 3 $1,600 4 $2,000 5 $2,500 6 $3,100 The above cost data are for a firm operating in the short run. Based on the table, which of the following is correct? Average variable cost of producing three units of output is $400. Average fixed cost of producing 4 units is $500. Diminishing marginal returns set in with the production of the third output.

Output Total Cost 0 $400 1 $900 2 $1,300 3 $1,600 4 $2,000 5 $2,500 6 $3,100 The above cost data are for a firm operating in the short run. Based on the table, which of the following is correct? Average variable cost of producing three units of output is $400. Average fixed cost of producing 4 units is $500. Diminishing marginal returns set in with the production of the third output.

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter7: Economies Of Scale And Scope
Section: Chapter Questions
Problem 5MC
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Output Total Cost 0 $400 1 $900 2 $1,300 3 $1,600 4 $2,000 5 $2,500 6 $3,100 The above cost data are for a firm operating in the short run. Based on the table, which of the following is correct? Average variable cost of producing three units of output is $400. Average fixed cost of producing 4 units is $500. Diminishing marginal returns set in with the production of the third output.
Transcribed Image Text:Output Total Cost 0 $400 1 $900 2 $1,300 3 $1,600 4 $2,000 5 $2,500 6 $3,100 The above cost data are for a firm operating in the short run. Based on the table, which of the following is correct? Average variable cost of producing three units of output is $400. Average fixed cost of producing 4 units is $500. Diminishing marginal returns set in with the production of the third output.
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