Question

In order to produce 100 oatmeal cookies, Goodie Cookie Co. incurs an average total cost of $0.25 per cookie. The company’s marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is a) $60 b) $50 c) $25 d) $20

Answer 1

Answer:

Option D : $20

Step-by-step explanation:

The average total cost to produce 100 oatmeal cookie = $0.25 per cookie.

So, total cost for 100 cookies will be = $0.25\times100=25$ dollars

The company’s marginal cost is constant at $0.10 for all oatmeal cookies produced.

When 50 cookies are produced, the marginal cost will be = $0.10\times50=5$dollars

The total cost to produce 50 oatmeal cookies = $25-5=20$ dollars

Hence, option D is correct.