Table 14-10
Suppose that a firm in a competitive market faces the following revenues and costs:

Quantity

Total Revenue

Total Cost

0

$0

$3

1

$7

$5

2

$14

$9

3

$21

$15

4

$28

$23

5

$35

$33

6

$42

$45

7

$49

$59

Refer to Table 14-10. Which level of production in the table has the lowest average variable cost?

a. 2 units
b. 3 units
c. 1 unit
d. 4 units

the answer is a, but I need the reason

Mr. beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the bb-1 set. (bb-1 stands for body beautiful number 1.) the carrying cost for bb-1 is $5 per set per year. to meet demand, mr. beautiful orders large quantities of bb-1 seven times a year. the stockout cost for bb-1 is estimated to be $50 per set. over the past several years, mr. beautiful has observed the following demand during the lead time for bb-1: demand during lead time probability40 0.150 0.260 0.270 0.280 0.290 0.1total 1.0the reorder point for bb-1 is 60 sets. what level of safety stock should be maintained for bb-1?