Question

The average total cost to produce 100 cookies is $0.25 per cookie. The marginal cost is constant at $0.10 for all cookies produced.

(2 points) What is the total cost to produce 100 cookies?

ATC = $.25*100=$25

b) (4 points) What is the total cost to produce 50 cookies?

Answer 1

Answer:

a) $25

b) $20

Explanation:

a) What is the total cost to produce 100 cookies?

The total cost to produce 100 cost is given by the average total cost of $0.25 multiplied by 100 units.

$TC = \ 0.25*100=\ 25$

b) What is the total cost to produce 50 cookies?

The total cost to produce 50 cookies is equal to the cost of producing 100 units subtracted by the marginal cost ($0.10 per unit) of the additional 50 units:

$TC = \ 25 -(\ 0.10*50)=\ 20$

Answer 2

a. The total cost to produce 100 cookies is $25.

b. The total cost to produce 50 cookies is $20.  

a. Total cost to produce 100 cookies:

Total cost to produce= Average total cost × Quantity

Total cost to produce=$.25×100

Total cost to produce=$25

b. Total cost to produce 50 cookies:

Total cost to produce=$25-($0.10 ×50)

Total cost to produce=$25-$5

Total cost to produce=$20

Inconclusion the total cost to produce 100 cookies is $25 and the total cost to produce 50 cookies is $20.  

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