Refer to the following figure:
The price of capital is $50 per unit.
-The minimum cost of producing 800 units of output is
A) $ 6,000.
B) $ 7,500.
C) $ 8,000.
D) $10,000.

Question

Refer to the following figure:
  The price of capital is $50 per unit.
-The minimum cost of producing 800 units of output is
A) $ 6,000. 
B) $ 7,500. 
C) $ 8,000. 
D) $10,000.

Quizplus · Accepted Answer

To produce 800 units of output, we need to look at the point where the output level is closest to 800 on the graph. This occurs at point F. At point F, the total cost is approximately $7,500 (intersection of the 800 unit output line with the total cost curve). This is the minimum cost to produce 800 units of output, so the best choice is option B.

Refer to the Following Figure