The Toys-R-Us Toy Company can produce 500 water pistols for a total cost of $1,400. If the variable cost of producing 500 water pistols is $1,300 then

A. fixed cost must be $100

B. marginal cost must be $1,300

C. marginal cost must be increasing

D. average variable cost must be decreasing

Question

Ernest Green

Business

4 October, 09:55

The Toys-R-Us Toy Company can produce 500 water pistols for a total cost of $1,400. If the variable cost of producing 500 water pistols is $1,300 then

A. fixed cost must be $100

B. marginal cost must be $1,300

C. marginal cost must be increasing

D. average variable cost must be decreasing

+2

Answers (1)

Know the Answer?

Santos Newton · Answer 1

The Correct option is Option A.

Explanation:

Total quantities of water pistols produced = 500 units.

Total costs incurred during production = $1400.

Variable costs of producing the 500 units of water Pistols = $ 1300.

But we know that:

Total cost = Fixed Costs + Variable Costs.

Therefore:

$ 1400 = Fixed Costs + $1300.

Fixed Costs = $ 1400 - $1300.

Fixed is $100.

The Toys-R-Us Toy Company can produce 500 water pistols for a total cost of $1,400. If the variable cost of producing 500 water pistols is $1,300 thenA. fixed cost must be $100B. marginal cost must be $1,300C. marginal cost must be increasingD. average variable cost must be decreasing

The Toys-R-Us Toy Company can produce 500 water pistols for a total cost of $1,400. If the variable cost of producing 500 water pistols is $1,300 then

A. fixed cost must be $100

B. marginal cost must be $1,300

C. marginal cost must be increasing

D. average variable cost must be decreasing