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1. ABC Ltd. is considering increasing the production level . What is the approximate marginal cost of increasing production form its July level of 40 units to 41 units?
- A. 160
- B. 160
- C. 160
- D. 160
Answer: Option C
Explanation:
The variable cost at 40 units production is 4000 and at 46 units is around 4800 – the graph is almost a straight line between these two points. Thus the marginal cost of increasing production from 40 units =
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