Calculate Average Variable Cost Of A Firm

Question

1. Use the following to answer the question:

Production Data for Baseball Bat Company

No. of workers    Total output (No. of bats)
       0                      0
       1                    20
       2                    42
       3                    66
       4                    94
       5                  124
       6                  150
       7                  170
       8                  184
       9                  194
     10                  200
     11                  204
     12                  202
     13                  198
     14                  190

In the table, average variable cost is at its minimum:

A) somewhere between the sixth and seventh workers.
B) for the fifth worker.
C) somewhere between the fifth and sixth workers.
D) for the third worker.

2. Assuming that price is greater than average variable cost, a profit maximizing monopolist will produce where:

A) Elasticity of demand is less than one.
B) Elasticity of demand is equal to one.
C) Elasticity of demand is greater than one.
D) There is no relationship between elasticity of demand and where a monopolist may choose to produce.


Summary

These multiple choice questions belong to Economics. The 1st question is about calculating the average variable cost of a firm and the 2nd question is about price being greater than average variable cost and the steps taken by profit maximizing monopolist.

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