Question

5. 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. What is the total cost to produce 50 cookies

Answer 1

$20

Step-by-step explanation:

First, we need to find the total cost of producing 100 cookies.

From the above question, the total cost to produce 100 cookies is given by the average total cost of $0.25 multiplied by 100 units

TC = $0.25 × 100 = $25.

Therefore, the total cost to produce 50 cookies, is equal to the cost of producing 100 units minus the marginal cost ($0.10 per unit) of the additional 50 units.

TC = $25 - ($0.1 × 50) = $20