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The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true?
Most Upvoted Answer
The marginal cost for a firm of producing the 9th unit of output is Rs...
Answer:
To determine which of the following must be true, we need to consider the relationship between marginal cost and average cost.
Marginal Cost:
The marginal cost is the additional cost of producing one more unit of output. It is calculated by dividing the change in total cost by the change in quantity.
Average Cost:
The average cost is the total cost of production divided by the number of units produced.
Relationship Between Marginal Cost and Average Cost:
If the marginal cost is less than the average cost, then the average cost will be decreasing. If the marginal cost is greater than the average cost, then the average cost will be increasing. If the marginal cost is equal to the average cost, then the average cost will be constant.
Analysis of Given Information:
In this case, we know that the marginal cost of producing the 9th unit of output is Rs. 20. This means that it costs the firm an additional Rs. 20 to produce the 9th unit. We also know that the average cost at the same level of output is Rs. 15. This means that the total cost of producing 9 units is Rs. 135 (9 x 15).
Conclusion:
Since the marginal cost is greater than the average cost, the average cost must be increasing. Therefore, the correct answer is: "If the firm produces more units, the average cost of production will increase."
To determine which of the following must be true, we need to consider the relationship between marginal cost and average cost.
Marginal Cost:
The marginal cost is the additional cost of producing one more unit of output. It is calculated by dividing the change in total cost by the change in quantity.
Average Cost:
The average cost is the total cost of production divided by the number of units produced.
Relationship Between Marginal Cost and Average Cost:
If the marginal cost is less than the average cost, then the average cost will be decreasing. If the marginal cost is greater than the average cost, then the average cost will be increasing. If the marginal cost is equal to the average cost, then the average cost will be constant.
Analysis of Given Information:
In this case, we know that the marginal cost of producing the 9th unit of output is Rs. 20. This means that it costs the firm an additional Rs. 20 to produce the 9th unit. We also know that the average cost at the same level of output is Rs. 15. This means that the total cost of producing 9 units is Rs. 135 (9 x 15).
Conclusion:
Since the marginal cost is greater than the average cost, the average cost must be increasing. Therefore, the correct answer is: "If the firm produces more units, the average cost of production will increase."
Community Answer
The marginal cost for a firm of producing the 9th unit of output is Rs...
Avg cost and marginal cost must be rising
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The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true?
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The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true?.
The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The marginal cost for a firm of producing the 9th unit of output is Rs. 20. Average cost at the same level of output is Rs. 15. Which of the following must be true?.
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