If the total cost of producing 2 pounds of cheese is $6 and the total cost of producing 4 pounds of cheese is $8,then:
A)total cost is declining.
B)average total cost is declining.
C)average total cost is increasing.
D)average total cost is constant.
E)total cost is constant.

Question

Quizplus · Accepted Answer

The average total cost for 2 pounds is $3 per pound ($6/2), and for 4 pounds, it is $2 per pound ($8/4). Since the average total cost decreases as production increases, the average total cost is declining.

If the Total Cost of Producing 2 Pounds of Cheese