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A linear cost function is C(x) = 7x + 150. (Assume C is measured in dollars.) (a) What are the slope and the C-intercept? slope 7 C-intercept 150 (b) What is the marginal cost MC? MC = 7 What does the marginal cost mean? O If production is increased by this many units, the cost increases by $1. Each additional unit produced costs this much (in dollars). O Each additional unit produced reduces the cost by this much (in dollars). O If production is increased by this many units, the cost decreases by $1. (c) How are your answers to parts (a) and (b) related? slope O marginal cost C-interce slope = marginal cost, and C-intercept = fixed costs C-intercept = marginal cost slope O slope fixed costs, and C-intercept = marginal cost = (d) What is the cost of producing one more item if 50 are currently being produced? $9 X What is the cost of producing one more item if 100 are currently being produced? $9 x

A linear cost function is C(x) = 7x + 150. (Assume C is measured in dollars.) (a) What are the slope and the C-intercept? slope 7 C-intercept 150 (b) What is the marginal cost MC? MC = 7 What does the marginal cost mean? O If production is increased by this many units, the cost increases by $1. Each additional unit produced costs this much (in dollars). O Each additional unit produced reduces the cost by this much (in dollars). O If production is increased by this many units, the cost decreases by $1. (c) How are your answers to parts (a) and (b) related? slope O marginal cost C-interce slope = marginal cost, and C-intercept = fixed costs C-intercept = marginal cost slope O slope fixed costs, and C-intercept = marginal cost = (d) What is the cost of producing one more item if 50 are currently being produced? $9 X What is the cost of producing one more item if 100 are currently being produced? $9 x

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
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A linear cost function is C(x) 7x + 150. (Assume C is measured in dollars.) (a) What are the slope and the C-intercept? slope 7 C-intercept 150 (b) What is the marginal cost MC? MC 7 What does the marginal cost mean? O If production is increased by this many units, the cost increases by $1. Each additional unit produced costs this much (in dollars). O Each additional unit produced reduces the cost by this much (in dollars). O If production is increased by this many units, the cost decreases by $1. (c) How are your answers to parts (a) and (b) related? slope C-interced marginal cost slope marginal cost, and C-intercept = fixed costs C-intercept = marginal cost slope = O slope fixed costs, and C-intercept = marginal cost = (d) What is the cost of producing one more item if 50 are currently being produced? $9 x What is the cost of producing one more item if 100 are currently being produced? $9 X
Transcribed Image Text:A linear cost function is C(x) 7x + 150. (Assume C is measured in dollars.) (a) What are the slope and the C-intercept? slope 7 C-intercept 150 (b) What is the marginal cost MC? MC 7 What does the marginal cost mean? O If production is increased by this many units, the cost increases by $1. Each additional unit produced costs this much (in dollars). O Each additional unit produced reduces the cost by this much (in dollars). O If production is increased by this many units, the cost decreases by $1. (c) How are your answers to parts (a) and (b) related? slope C-interced marginal cost slope marginal cost, and C-intercept = fixed costs C-intercept = marginal cost slope = O slope fixed costs, and C-intercept = marginal cost = (d) What is the cost of producing one more item if 50 are currently being produced? $9 x What is the cost of producing one more item if 100 are currently being produced? $9 X
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