It costs a furniture company $8,750 to produce 25 tables.The company's total cost will be $9,125 if it produces a 26^th table.If the company produces 26 tables,then

Question

Quizplus · Accepted Answer

We can use the formula for average cost (AC) and marginal cost (MC):
AC = total cost / quantity produced
MC = change in total cost / change in quantity produced

From the information given, we can calculate the average cost of producing 25 tables:
AC = 8750 / 25 = 350

To produce 26 tables, the company's total cost will be $9,125:
9106 - 8750 = 375 (the cost of producing one extra table)

Therefore, the marginal cost of producing the 26th table is $375.

Since the average cost of producing 25 tables is $350 and the marginal cost of producing the 26th table is $375, we can conclude that the average cost is less than the marginal cost.

Therefore, the answer is C.

It Costs a Furniture Company $8,750 to Produce 25 Tables