since you know, marginal cost is the change in the total cost that arises when the quantity produced has an increment by unit. That is, it is the cost of producing one more unit of a good. and in this case marginal cost is $0.

so, the cost will remain $223,000 despite of the quantities.

so, for infinite quantity, the average total cost will approach ZERO

OPTION C is correct.

Thank you!

Jan 20th, 2015

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