It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. the company's cost will be $50,009 if it produces a

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prisoha [69]

3 years ago

9

It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. the company's cost will be $50,009 if it produces a

n additional pound of steak. if the company produces 5,001 pounds of steak then

Business

1 answer:

Thepotemich [5.8K] · Answer 1 · 2022-02-10T14:13:10+03:00

Calculating average cost of steak initially when only 5000 pounds was produced
Average cost= 50000/5000
AC= 10$
Now when 1 pound is added only 9$ is added in total cost so marginal cost
MC= 9$
From above calculations we can see that AC>MC
so we can say that the average cost of production is greater than marginal cost so it will be beneficial to produce more