Tankao makes earbuds for mobile devices.When Tankao produces 20 sets of earbuds,its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:
A)marginal cost is less than $3 per set.
B)marginal cost is $3 per set.
C)average fixed cost is $3 per set.
D)marginal cost is equal to its average fixed cost.

Question

Quizplus · Accepted Answer

The average total cost (ATC) is $8 per set, and the average variable cost (AVC) is $5 per set. The difference between ATC and AVC gives the average fixed cost (AFC), which is $3 per set. Marginal cost (MC) information is not provided directly, so we cannot accurately determine its relationship to AFC without additional data.

Tankao Makes Earbuds for Mobile Devices