Table 13-5
At Bob’s Baseball Factory, Bob pays all his workers the same wage and labour is his only variable cost. Consider the following information about baseball production at Bob’s Baseball Factory:

-From the information in Table 13-5,what can we conclude about Bob's average variable cost
A)It decreases as output rises from 0 to 10, but rises after that.
B)It decreases as output rises from 0 to 26, but rises after that.
C)It decreases as output rises from 0 to 33, but increases after that.
D)It decreases continually as output rises.

Question

Table 13-5 
At Bob’s Baseball Factory, Bob pays all his workers the same wage and labour is his only variable cost. Consider the following information about baseball production at Bob’s Baseball Factory:

-From the information in Table 13-5,what can we conclude about Bob's average variable cost
A)It decreases as output rises from 0 to 10, but rises after that. 
B)It decreases as output rises from 0 to 26, but rises after that. 
C)It decreases as output rises from 0 to 33, but increases after that. 
D)It decreases continually as output rises.

Quizplus · Accepted Answer

The correct conclusion is that Bob's average variable cost decreases as output rises from 0 to 26, but rises after that. This indicates that the cost per unit decreases up to a certain level of production, after which it starts to increase.

Table 13-5 at Bob’s Baseball Factory, Bob Pays All His Workers the His