Assume the following cost information about Fred's widget company: Its fixed cost is $27, and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5 . Given this information:
a. average fixed cost rises from an output of four to an output of five
b. average fixed cost is greater than marginal cost for the second unit produced.
c. the output level which minimizes average total cost is four units.
d. average variable cost rises, but average total cost falls, as output increases from four to five.
d
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