Post Utme Futo 2024 Commerce Question 2

Practice objective / multiple choice question 2 from the 2024 Post Utme Futo Commerce examination.

Post Utme Futo 2024 Commerce Objective / Multiple Choice
Question 2 POST_UTME_FUTO • 2024 • COMMERCE • objective

A firm is considering two different production processes: one that produces 100 units of output per hour with a fixed cost of ₦10,000 and a variable cost of ₦5 per unit, and another that produces 200 units of output per hour with a fixed cost of ₦20,000 and a variable cost of ₦3 per unit. Which production process should the firm choose if it wants to minimize its average cost?

Answer Options

Correct Answer A. The first production process.
B. The second production process.
C. Both production processes have the same average cost.
D. Neither production process has the lowest average cost.
Correct Answer
A
Correct Option:
The first production process.

About This Question

This is Post Utme Futo 2024 Commerce Question 2. It is one of the objective questions from the 2024 Post Utme Futo Commerce examination.

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