Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars)is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. As you increase your production of t-shirts, your average fixed cost ________ and your marginal cost ________.

Question

Quizplus · Accepted Answer

If Q increases by one unit, total cost always increases by 10, so marginal cost is constant. Average fixed cost, which equals 300/Q, decreases as Q increases.

Imagine That You Are an Entrepreneur, Making Designer T-Shirts in Your