Though the ________ method of setting an advertising budget is simple to use and helps management think about the relationships
1 answer:
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Answer: The answer is as follows:
Explanation:
(1) Average total cost =
=
= 0.2
(2) Cost of producing an additional unit of hot-dog = 200.08 - 200
= $0.08
∴ Marginal cost of producing the 1,001th is $0.08.
(3) Here, the marginal cost of production is less than the average total cost of production then the average total cost of production must be falling. It is due to the fact that marginal cost is the change in total cost that is arises from the change in the quantity by one unit.
Therefore, Average total cost of production must be falling.