4. a) Suppose there are 30 people in a room with the average age
of 40 years. A 15-year-old boy walks in and the average age of the
group becomes 40.5. Is this possible?
b) A firm is producing 30 units of output at an average cost of $40.
Adding another unit will increase costs by $15 (this is the marginal
cost) and the average cost will rise to $40.5. Is this possible?
c) If average cost is falling, what must be true of marginal
cost?