The table below provides information on output per month and short-run costs for a firm producing outdoor wooden lounge chairs.All costs are in dollars.
TABLE 7-5
-Refer to Table 7-5.Given the information in the table about short-run costs,this firm would minimize the average variable cost of production when producing
A)10 chairs.
B)15 chairs.
C)20 chairs.
D)25 chairs.
E)30 chairs.

Question

The table below provides information on output per month and short-run costs for a firm producing outdoor wooden lounge chairs.All costs are in dollars.
  TABLE 7-5
-Refer to Table 7-5.Given the information in the table about short-run costs,this firm would minimize the average variable cost of production when producing
A)10 chairs. 
B)15 chairs. 
C)20 chairs. 
D)25 chairs. 
E)30 chairs.

Quizplus · Accepted Answer

The average variable cost is minimized at the output level where the marginal cost equals the average variable cost. This typically occurs at the lowest point of the average variable cost curve, which is often given in the problem or can be calculated from the data.

The Table Below Provides Information on Output Per Month and Short-Run