Extract D states: ‘The fixed setup and calibration cost for the automated chemical synthesis reactor is £385, plus an additional £940 in electricity and raw material costs per production cycle. Each cycle reliably produces 145 kilograms of a high-purity medical compound.’
Calculate the average total cost of producing one kilogram of the medical compound. Give your answer to the nearest penny.
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.