Question

The schedule shows the short run marginal costs of producing good X.

Units of X Marginal cost ($)

1 40

2 30

3 30

4 60

5 120

Given that the total fixed cost is $20, calculate the level of output which minimises Average Total Cost (ATC).

Answer 1

The formula for average total cost is;

$ATC=\frac{TC}{unit}$

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