Exhibit 23-7

-Refer to Exhibit 23-7.At the profit-maximizing output level,average total cost is

Question

Exhibit 23-7
 
-Refer to Exhibit 23-7.At the profit-maximizing output level,average total cost is

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal revenue equals marginal cost, which is at an output of 4 units in this case. At this output level, the average total cost is $5.00 as shown by the intersection of the marginal cost curve and the average total cost curve. Therefore, the correct answer is C.

Exhibit 23-7 -Refer to Exhibit 23-7.At the Profit-Maximizing Output Level,average Total Cost