If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output,
A)marginal cost is increasing.
B)average total cost is increasing.
C)average fixed cost is increasing.
D)total cost is either increasing or decreasing.
E)none of the above

Question

Quizplus · Accepted Answer

The difference in average variable cost between 10 and 11 units of output indicates the additional cost incurred in producing the 11th unit. This difference in cost is known as marginal cost. As the average variable cost increases between 10 and 11 units of output, we can infer that marginal cost is also increasing. Therefore, option A is the correct choice.

If the Average Variable Cost of Producing 10 Units Is