16. The cost to produce an item is C(x) = 13x + 220. a. If 200 items are made, what is the marginal cost to produce one more? b. What is the average cost to make 200 items? What is the average cost to make 2,000 items? c. Suppose each item sells for $20 dollars. Find the break-even point.

16. The cost to produce an item is C(x) = 13x + 220. a. If 200 items are made, what is the marginal cost to produce one more? b. What is the average cost to make 200 items? What is the average cost to make 2,000 items? c. Suppose each item sells for $20 dollars. Find the break-even point.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

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16. The cost to produce an item is C(x) = 13x + 220.
a. If 200 items are made, what is the marginal cost to produce one more?
b. What is the average cost to make 200 items? What is the average cost to
make 2,000 items?
c. Suppose each item sells for $20 dollars. Find the break-even point.

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Step 1: Explain Marginal Cost, Average Cost and Break Even point

Step 2: Part a

Step 3: Part b

Step 4: Part c

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