Table 5.4-Plant costs
This table shows total costs at different output levels for a given plant.
-In Table 5.4,the lowest average total cost occurs at a production rate of:
A) 10 units per day.
B) 20 units per day.
C) 30 units per day.
D) 40 units per day.

Question

Table 5.4-Plant costs
This table shows total costs at different output levels for a given plant. 
-In Table 5.4,the lowest average total cost occurs at a production rate of:
A) 10 units per day. 
B) 20 units per day. 
C) 30 units per day. 
D) 40 units per day.

Quizplus · Accepted Answer

The lowest average total cost occurs at a production rate of 30 units per day, where the average total cost is $60 per unit. At both lower and higher output levels, the average total cost increases. Therefore, choice C is the most cost-effective option.

Table 5.4-Plant Costs This Table Shows Total Costs at Different Output Levels for Output