ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose you are the owner of a firm producing jelly beans. Your production costs are shown in the table.
Jelly Bean Production
Вохes
Average cost per box
100
$0.95
101
$0.96
102
$0.97
$0.98
103
Initially, you produce 100 boxes of jelly beans per time period. Thena new customer calls and places an additional order for jelly beans,
requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it?
Choose one:
O. A Yes, because $1.75 is greater than average total cost,
O B. No, because $1.75 is less than average total cost.
O C. Yes, because $1.75 is greater than the marginal cost.
O D. No, because $1.75 is less than the marginal cost.
9 E. We can't say because we don't know average variable cost.
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Transcribed Image Text:See Hint Suppose you are the owner of a firm producing jelly beans. Your production costs are shown in the table. Jelly Bean Production Вохes Average cost per box 100 $0.95 101 $0.96 102 $0.97 $0.98 103 Initially, you produce 100 boxes of jelly beans per time period. Thena new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it? Choose one: O. A Yes, because $1.75 is greater than average total cost, O B. No, because $1.75 is less than average total cost. O C. Yes, because $1.75 is greater than the marginal cost. O D. No, because $1.75 is less than the marginal cost. 9 E. We can't say because we don't know average variable cost.
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