Question

n order to produce 100 oatmeal cookies, GoodieCookieCo incurs an average total cost of $0.25 per cookie. The company's marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is

Answer 1

$20

Explanation:

Given Average total cost to produce 100 oatmeal cookies = $0.25

Total cost(TC) = 0.25 x 100 = 25

Marginal Cost (MC)= $0.10

Total Variable Cost(TVC) to produce 100 cookies = Marginal Cost X 100 = 10

Total Fixed Cost (TFC) to produce 100 cookies = TC-TVC = 25-10 = $15

Total cost of producing 50 cookies

=TFC+TVC

=TFC + (MC X 50)

=15+(0.10 X 50)

=15+5

=$20