Concept #1: Average Cost and Marginal Cost
Concept #2: Patterns of MC, AFC, AVC, and ATC curves
Practice: A firm is currently producing 100 units with an average total cost of $44 and a marginal cost of $32. If it were to increase production to 101 units, which of the following must be true?
Practice: The government imposes a $10,000 per year inspection fee on all restaurants. Which cost curves are affected?
Practice: A firm is producing 1,500 units at a total cost of $15,000. If it were to increase production to 1,501 units, its total cost would rise to $15,012. Which of the following is true?