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Costs and economies of scale

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Question 11

An artisanal coffee roastery roasts 80 batches of organic coffee per month. The monthly fixed costs of running the roastery (such as rent and equipment leasing) total £4,800. The average variable cost per batch is £14.20.

Assuming the average variable cost remains unchanged, what is the change in the average total cost when the roastery increases its monthly production to 81 batches?

Decreases by £0.92

Decreases by £0.74

Increases by £14.20

Remains the same

Costs and economies of scale Questions

  1. A Level
  2. /Economics
  3. /Costs and economies of scale