Asked by Summer Bourbon on Jul 26, 2024
Verified
When Aishe's Bar-B-Que produces 10 pork sandwiches,the total cost is $5.When 11 pork sandwiches are produced,the total cost rises to $6.From this we know that the marginal cost of the eleventh pork sandwich:
A) is equal to the average cost of 11 pork sandwiches.
B) is greater than the average cost of 11 pork sandwiches.
C) is less than the average cost of 11 pork sandwiches.
D) can't be calculated without more information.
Marginal Cost
The increase in expense from creating one more unit of a product or service.
Total Cost
The total cost of production, encompassing both variable and fixed expenses.
Average Cost
The total cost of production divided by the number of goods produced, representing the cost on average of producing each unit of output.
- Analyze the impact of changes in production levels on marginal cost.
Verified Answer
MC
megan coutsJul 30, 2024
Final Answer :
B
Explanation :
The fact that the cost increased by $1 for the 11th sandwich means that the marginal cost of the 11th sandwich is $1. The average cost of 11 sandwiches is ($6 total cost for 11 sandwiches)/(11 sandwiches) = $0.545 per sandwich. Therefore, the marginal cost ($1) is greater than the average cost ($0.545) for the 11th sandwich.
Learning Objectives
- Analyze the impact of changes in production levels on marginal cost.