Economies of scale

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Economies of Scale

A company faces the following costs at the respective production level in addition to its fixed costs of $50,000: 

Quantity   Marginal Cost   Sale Price   Marginal Return

1                 $10,000             $20,000     $10,000
2                $11,000              $ 20,000     $9,0003                $12,000             $20,000      $8,000
4                $13,000             $20,000      $7,0005                $14,000             $20,000      $6,000

1) Calculate average total cost of each quantity. What happens to the Average Total Cost as output increases from 1 to 5?

Reference no: EM133063217

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