Exhibit 7-12 Cost Schedule for Producing Pizza

Multiple Choice

Exhibit 7-12 Cost schedule for producing pizza

In Exhibit 7-12, the marginal cost of producing the 3rd pizza

A) is higher than the average total cost of 3 pizzas, so the average total cost curve is increasing at a quantity of 3 pizzas.
B) is lower than the average total cost of 3 pizzas, so the average total cost curve is decreasing at a quantity of 3 pizzas.
C) is equal to the average total cost of 3 pizzas, so the average total cost curve is minimized at a quantity of 3 pizzas.
D) is higher than the average fixed cost of 3 pizzas, so the average fixed cost curve is increasing at a quantity of 3 pizzas.