the supply curve of any firm is S i (p)  p/2.If a firm produces 2 units of output, what are its total variable costs?A) $8B) $6C) $2D) $4E) There is not enough information given to determine total variable costs.

Question

the supply curve of any firm is S i (p)    p/2.If a firm produces 2 units of output, what are its total variable costs?A) $8B) $6C) $2D) $4E) There is not enough information given to determine total variable costs.

Ethan Gasper · Accepted Answer

Final Answer : D, Explanation :  To determine total variable costs, we need to know the firm's variable cost per unit of output. This information is not directly given in the supply curve. However, we can use the fact that a firm's supply curve is equal to its marginal cost curve above its minimum average variable cost (MAVC) to find the variable cost per unit.In this case, we can see that the supply curve (S i (p)   p/2) intersects the y-axis at a price of $2. This implies that the minimum AVC for the firm is $2 per unit.Therefore, the variable cost per unit of output is $2 per unit. To produce 2 units of output, the firm would have total variable costs of $2 x 2 = $4.Thus, the correct answer is choice D.

the supply curve of any firm is S_i(p)  p/2.If a firm produces 2 units of output, what are its total variable costs?

A) $8
B) $6
C) $2
D) $4
E) There is not enough information given to determine total variable costs.

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Related questions

the supply curve of any firm is Si(p)  p/2.If a firm produces 2 units of output, what are its total variable costs?A) $8B) $6C) $2D) $4E) There is not enough information given to determine total variable costs.

Definitions

Learning Objectives

Learning Objectives

Related questions

the supply curve of any firm is S_i(p)  p/2.If a firm produces 2 units of output, what are its total variable costs?

A) $8
B) $6
C) $2
D) $4
E) There is not enough information given to determine total variable costs.