coca-cola company is producing 1,500 bottles daily with total cost of 3,500. in peak season, they increase 5% of the manpower versus on its current where they were able to produce 3,000 bottles with total cost of $7,000. find the average coat of producing 1,500 bottles. what is the marginal cost?
Answers
Answer:
average cost = 3500
marginal cost = 2.33
Explanation:
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The average cost of producing is $2.33
The marginal cost of producing is $2.33
Explanation:
The average cost of producing is computed as:
Average cost = Total Cost of Production / Numbers of units produced
where
Total Cost of production = $3,500
Number of units produced = 1,500
Putting the values above:
Average cost = $3500 / 1500
Average cost = $2.33
The marginal cost of the company producing the bottles:
Marginal Cost = Change in Total Costs / Change in quantity
where
Change in Total costs = $7,000 - $3,500
Change in total costs = $3,500
Change in quantity = 3,000 - 1,500
Change in quantity = 1,500
Putting the values above:
Marginal costs = $3,500 / 1,500
Marginal costs = $2.33