Use the following to answer questions: Table: Competitive Firm 2 $$\begin{array} { c c c }
\hline \text { Quantity (Units) } & \text { Total Revenue (\$) } & \text { Total Cost (\$) } \
\hline 0 & 0 & 30 \
1 & 80 & 50 \
2 & 160 & 80 \
3 & 240 & 120 \
4 & 320 & 170 \
5 & 400 & 230 \
6 & 480 & 300 \
7 & 560 & 380 \
8 & 640 & 470 \
\hline
\end{array}$$
-(Table: Competitive Firm 2) Refer to the table that shows the revenue and cost schedules for a competitive firm. What is the average cost at the profit-maximizing quantity?
A) $54.30
B) $58.75
C) $50
D) $80

Question

Use the following to answer questions: Table: Competitive Firm 2 $$\begin{array} { c c c } 
\hline \text { Quantity (Units) } & \text { Total Revenue (\$) } & \text { Total Cost (\$) } \
\hline 0 & 0 & 30 \
1 & 80 & 50 \
2 & 160 & 80 \
3 & 240 & 120 \
4 & 320 & 170 \
5 & 400 & 230 \
6 & 480 & 300 \
7 & 560 & 380 \
8 & 640 & 470 \
\hline
\end{array}$$
-(Table: Competitive Firm 2) Refer to the table that shows the revenue and cost schedules for a competitive firm. What is the average cost at the profit-maximizing quantity?
A) $54.30
B) $58.75
C) $50
D) $80

Quizplus · Accepted Answer

Average cost is total cost divided by quantity. At the profit-maximizing quantity of 4 units, total cost is $170. So, average cost is $170 / 4 = $42.50.

Use the Following to Answer Questions: Table: Competitive Firm 2