Question

consider a firm that produces units of output using capital and labor. due to changes in market conditions, it has decided to reduce its daily output from 5 units to 4 units. to determine how much its total costs will decline by doing so, the firm will evaluate its:

Answer 1

A firm that produces units of output using capital and labor to determine  its total costs will decline by doing so, the firm will evaluate its: Marginal cost Function .

Option C is correct .

Marginal cost is the change in cost due to producing on excess unit of affair. To determine how big its total cost decline, the establishment will estimate its marginal cost function.

Marginal cost function :

Marginal cost represents the gradual costs incurred when producing fresh units of a good or service. It's figured by taking the total change in the cost of producing further goods and dividing that by the change in the number of goods produced.Marginal cost is calculated as the aggregate charges needed to manufacture one fresh good. thus, it can be measured by changes to what charges are incurred for any given fresh unit. Marginal Cost = Change in Total Charges ÷ Change in volume of Units Produced.

Question is incomplete ,missing option is given below :

Consider a firm that produces units of output using capital and labor. Due to changes in market conditions, it has decided to reduce its daily output from 5 units to 4 units. To determine how much its total costs will decline by doing so, the firm will evaluate its: Group of answer choices

A.marginal product function

B.average product function

C.marginal cost function

D.average total cost function

E.average variable cost function

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