Question

QUESTION 1 Not yet answered A farmer discovers that the total cost of growing 5 acres (an area measure) of eggplant is $500 and that the total cost of growing 6 acres of eggplant is $540. The marginal cost of growing this additional acre is and the average total cost is Marked out of 1.00 P Flag question Select one: Ο Α. $90, minimized B $40, rising Ос. $40, falling OD $90, constant

Answer 1

Marginal cost is the addition to the total cost by the production of additional output (MC=Change in TC/change in Q). Average total cost is total cost divided by the quantity of output (ATC= Total cost/ number of output).

Total cost of growing 5 acres of eggplant =$500

Total cost of growing 6 acres of eggplant is $540.

Change in growing eggplant is 1 acre

Change in cost growing eggplant is $40

Thus MC= $40/1=$40

ATC when 5 acres of eggplant is growing= $500/5=$100

ATC when 6 acres of eggplant is growing= $540/6= $90

Answer: $40, falling.