I hope that this is in the right section....
I am struggling and second guessing myself. Can someone help me if this is correct?
OK everyone...I am doubting myself a little on this one can someone verify if this is correct? Thanks in advance.
Firm XYZ is currently producing 50 units of output at an average cost of $18. Customer A is willing to offer Firm XYZ $220 to produce 5 more additional units. Firm XYZ's average variable cost and average fixed cost of producing 55 units is $20 and $2. Should Firm XYZ accept the offer?
Q AC TC
50 18 900
55 22 1210
AVC = 20, AFC = 2
ATC = AFC + AVC
ATC = 2 + 20
ATC = 22
No because average cost went up $310 and she’s only offered $220.