Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 11

The table shows how a firm's total cost changes as more workers are employed. | number of workers | total costs $ | |---|---| | 1 | 1200 | | 2 | 2000 | | 3 | 2700 | What would be the effect of employing a third worker on the firm's average costs and its marginal costs?

1. Aaverage costs decrease; marginal costs decrease
2. Baverage costs decrease; marginal costs increase
3. Caverage costs increase; marginal costs decrease
4. Daverage costs increase; marginal costs increase

As printed in the paper