Use the following to answer questions :
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,the marginal cost is approximately:
A) $100.
B) $120.
C) $250.
D) $200.

Question

Use the following to answer questions : 
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,the marginal cost is approximately:
A) $100. 
B) $120. 
C) $250. 
D) $200.

Quizplus · Accepted Answer

At 6 units of output, the marginal cost is approximately $200, which is the point where the MC curve intersects the AVC curve. This is the minimum point of AVC curve and hence the firm should produce 6 units of output to maximize profits in the short run.

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