Answer the questions based of the following information.
ABC Ltd. produces widgets for which the demand is unlimited and they can sell all of their production.The graph below describes the monthly variable costs incurred by the company as a function of the quantity produced. In addition, operating the plant for one shift results in a fixed monthly cost of Tk. 800. fixed monthly costs for second shift operation are estimated at Tk. 1200. Each shift operation provides capacity for producting 30 widgets per month.
Note : Average unit cost, AC = Total monthly costs/ monthly production, and marginal cost, MC is the rate of change in total cost for unit change in quality produced. </p>
From the data provided it can be infrered that, for productuon levels in the range of 0 to 60 units :
MC is a increasing function of production quantity. | |
MC is an increasing function of production quantity. | |
Initially MC is a decreasing function quantity, attains a minimum and then it is an increasing of production quantity. | |
None of above |