The Toys-R-Danger-Us Toy Company can produce 500 water pistols for a total cost of 1,400 . The company can also produce 1,000 water pistols for a total cost of 3,000 . but it would have costs of 200 even if it produced no water pistols. Which of the following is true?
a. Total cost is increasing at a decreasing rate.
b. Total cost is increasing at a constant rate.
c. Marginal cost is positive and increasing as output increases.
d. Variable cost is positive and decreasing as output increases.
e. Fixed cost is positive and decreasing as output increases.
Question 2
The Toys-R-Danger-Us Toy Company can produce 500 water pistols for a total cost of 1,400 . If the variable cost of producing 500 water pistols is 1,300, then
a. fixed cost must be 100
b. marginal cost must be 1,300
c. marginal cost must be increasing
d. average variable cost must be decreasing
e. average fixed cost must be constant
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