Author Question: The table below shows output, marginal cost, and average variable cost for the production of pairs ... (Read 57 times)

mmmmm · **on:** Oct 12, 2022

The table below shows output, marginal cost, and average variable cost for the production of pairs of shoes. All costs are in dollars.

Output	Marginal Cost	Average Variable Cost
50	60	140
70	45	115
90	35	95
110	30	80
130	35	65
150	60	60
170	105	65
190	180	75
210	230	90
230	290	110

TABLE 7-6

Refer to Table 7-6. Suppose this firm is producing 210 pairs of shoes per time period and that the variable factor of production is labour. Which of the following statements best describes this firm's production?
◦ Marginal cost is higher than average variable cost, so average product must be rising.
◦ Each additional unit of labour employed reduces the average variable cost of the pairs of shoes.
◦ The firm is producing below its capacity.
◦ Additional units of labour employed will increase the average variable cost of producing shoes.
◦ Marginal cost is higher than average variable cost, so marginal product must be rising.

Kevin5! · **Reply #1 on:** Oct 12, 2022

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