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Evelyn's Orchard Currently Produces 5,000 Gallons of Cider

Question 94

Multiple Choice

Evelyn's Orchard currently produces 5,000 gallons of cider. The marginal cost of the 5,000th gallon was $3, and the average total cost of the 5,000th gallon was $1.50. What can be concluded based on this information?


A) Evelyn's Orchard's marginal product of labor is increasing at 5,000 gallons.
B) If Evelyn's Orchard produces one more gallon, marginal cost and average total cost will be closer to zero.
C) Producing one more gallon will make the difference between marginal cost and average total cost smaller.
D) The quantity where marginal cost equals average total cost is less than 5,000 gallons.

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