Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units
A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is
A. less than $100.
B. more than $300.
C. between $200 and $300.
D. between $100 and $200.
Expert Solution
Answer: C
A firm's average total cost is the sum of its average variable cost and average fixed cost. This gives us the following equation:
ATC=AVC+AFC$80=$75+TFC/Q$80=$75+TFC/50$5=TFC/50TFC=$250ATC=AVC+AFC$80=$75+TFC/Q$80=$75+TFC/50$5=TFC/50TFC=$250
where:
- ATC is average total cost
- AVC is average variable cost
- AFC is average fixed cost
- TFC is total fixed cost
- Q is output
As you can see, we solved for total fixed cost which is $250 and thus the answer is C.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
