the supply curve of any firm is S i (p) = p/2.If a firm produces 5 units of output, what are its total variable costs?A) $37.50B) $25C) $50D) $23E) There is not enough information given to determine total variable costs.

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ishmael Hernandez · Accepted Answer

Final Answer : B, Explanation :  The supply curve S i (p) = p/2 implies that the price p is equal to 2 times the quantity supplied. If the firm produces 5 units, the price is 2 * 5 = $10. The total variable cost is the price times the quantity, so 5 * $10 = $50. However, the correct interpretation should consider the supply curve as the marginal cost curve, and the total variable cost is the area under the marginal cost curve up to the quantity produced. The marginal cost for each unit is p/2, so for 5 units, the total variable cost is (1/2)(5)(10) = $25.

the supply curve of any firm is S_i(p) = p/2.If a firm produces 5 units of output, what are its total variable costs?

A) $37.50
B) $25
C) $50
D) $23
E) There is not enough information given to determine total variable costs.

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the supply curve of any firm is Si(p) = p/2.If a firm produces 5 units of output, what are its total variable costs?A) $37.50B) $25C) $50D) $23E) There is not enough information given to determine total variable costs.

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Related questions

the supply curve of any firm is S_i(p) = p/2.If a firm produces 5 units of output, what are its total variable costs?

A) $37.50
B) $25
C) $50
D) $23
E) There is not enough information given to determine total variable costs.