Number of Cakes VC MC AVC FC TC ATC 0 50 1 30 2 50 3 25 4 155 Table 8.3 Table 8.3 presents the cost schedule for Candy's Cakes. If Candy produces three cakes, Candy's marginal costs are: A. $0 B. $25 C. $41.67

Number of Cakes

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 5QR

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Question

Table 8.3

Table 8.3 presents the cost schedule for Candy's Cakes. If Candy produces three cakes, Candy's marginal costs are:

A. $0

B. $25

C. $41.67

D. $75

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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