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9 June, 10:14

A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000, Group of answer choices average total cost is $2.50. average fixed cost is 50 cents. average variable cost is $2. average total cost is 50 cents.

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  1. 9 June, 10:43
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    The true answer:

    average fixed cost is 50 cents

    Explanation:

    The firm produces 400 units of output at a total cost of $1,200.

    Average total cost = $1,200/400 = $3.00

    Total variable costs are $1,000, total fixed cost = Total cost - total variable costs = $1,200 - $1,000 = $200

    Average variable cost = $1,000/400 = $2.50

    Average fixed cost = $200/400 = $0.50 (50 cents)
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