Consider a firm with a marginal cost that initially decreases, but after reaching a minimum then increases with output (that is, the more output is produced, the higher the marginal cost). Suppose the firm is producing in the short run, which implies that there are some fixed costs. Which of the following statements is correct? a. To produce at the minimum average total cost, the firm must produce more output than it would need to produce at the minimum average variable cost.
b. To produce at the minimum average variable cost, the firm must produce more output than it would need to produce at the minimum average total cost.
c. The level of output that minimizes the average variable cost is also the level of output that minimizes the average total cost.
d. There is no level of output that minimizes the average total cost.

Cadbury has a chocolate factory in dunedin, new zealand. for easter, it makes two kinds of “easter eggs”: milk chocolate and dark chocolate. it cycles between producing milk and dark chocolate eggs. the table below provides data on these two products. demand (lbs per hour) milk: 500 dark: 200 switchover time (minutes) milk: 60 dark: 30 production rate per hour milk: 800 dark: 800 for example, it takes 30 minutes to switch production from milk to dark chocolate. demand for milk chocolate is higher (500lbs per hour versus 200 lbs per hour), but the line produces them at the same rate (when operating): 800 lbs per hour. a : suppose cadbury produces 2,334lbs milk chocolate and 1,652 lbs of dark chocolate in each cycle. what would be the maximum inventory (lbs) of milk chocolate? b : how many lbs of milk and dark chocolate should be produced with each cycle so as to satisfy demand while minimizing inventory?