The diagram above represents the total production cost of a car manufacturer. Which of the following statements
correctly describes the cost of production?
a. The marginal cost increases as total output increases.
b. The average cost increases and then decreases as total output increases.
c. The average cost when producing 60 cars is $240,000.
d. The total production cost when producing 20 cars is $80,000 less the fixed costs.
e. The average cost is constant and is $4,000.
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