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WAEC Economics 2021 Question 20

Question 20

Theory of Costs and Revenue

A firm incurred the following costs in production. Use the information in the table to answer the question.
Output (bags of rice) | 0 | 10 | 20 | 30 | 40 | 50 | 60
Total Cost ($) | 100 | 200 | 300 | 380 | 440 | 520 | 600
The average cost of producing 40 bags of rice is

  1. A.$10
  2. B.$11
  3. C.$60.
  4. D.$80.
Show the answer and explanation

Answer: B ($11)

Explanation

AC = 440 ÷ 40 = $11.