Assume the following cost information about Fred's widget company: Its fixed cost is $27,and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5.Given this information:
A) the marginal cost of providing the second unit is $15.
B) the total cost of producing 4 units is $87.
C) the average total cost of producing five units is $21.
D) all of the above are true.

Question

Quizplus · Accepted Answer

The marginal cost for the second unit is $15 ($33 - $18). The total cost for 4 units is $87 ($27 fixed + $60 variable). The average total cost for 5 units is $21 (($27 + $78) / 5).

Assume the Following Cost Information About Fred's Widget Company: Its