Suppose That the Average Total Cost of Producing 5,000 Corvettes

Multiple Choice

Suppose that the average total cost of producing 5,000 Corvettes is $30,000 and the average total cost of producing 10,000 Corvettes is also $30,000. Assuming this cost structure continues to hold, what can you say about the change in General Motors' total cost of Corvette production when they make the 10,001st car?

A) The total cost of production does not change at all.
B) The total cost of production will increase by the average variable cost of the next car.
C) The change is negative because there are diseconomies of scale.
D) There is not enough information to answer this question.
E) The total cost of production will increase by $30,000.