Suppose You Know the Following Facts About the Smith Lamp

Multiple Choice

Suppose you know the following facts about the Smith Lamp Factory. When they produce 2,500 lamps, the difference between the average total cost and average variable cost is only $1. If the average variable cost for 5,000 lamps is $8, what is the total cost of producing 5,000 lamps?

A) $2,500
B) $4,000
C) $20,000
D) $40,000
E) $42,500