(Table: Output and Marginal Cost) Look at the table Output and Marginal Cost.After graduation you achieve your dream of opening your own art shop that specializes in selling mud statues.After careful study, you determine the information in the table.How many workers should you hire to minimize your average variable costs?
A)two
B)three
C)four
D)five

Question

Quizplus · Accepted Answer

To minimize average variable costs, we need to look for the point where the AVC is lowest. This occurs at a quantity of 4 units of output, where AVC is $17.25. At this point, the MC is equal to the AVC, so we know that the additional output from hiring another worker would increase AVC. Therefore, we should hire 4 workers to minimize average variable costs.

(Table: Output and Marginal Cost) Look at the Table Output