Exhibit 9-18 The firm in Exhibit 9-18, who charges the same price to all customers, will incur how much cost?

Question

Exhibit 9-18  The firm in Exhibit 9-18, who charges the same price to all customers, will incur how much cost?

Quizplus · Accepted Answer

The firm in Exhibit 9-18 produces between 100 and 150 units, and we know that each unit costs $0.10 to produce. Therefore, the total cost will be somewhere between $10 (for 100 units) and $15 (for 150 units). However, we also know that the firm incurs a fixed cost of $20, which must be added to the variable cost for each level of production. Therefore, the total cost will be somewhere between $30 ($20 fixed cost + $10 variable cost for 100 units) and $45 ($20 fixed cost + $15 variable cost for 150 units). The correct choice is therefore B.

Exhibit 9-18 the Firm in Exhibit 9-18, Who Charges