The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 300 + 4Q

Economics Jun 23, 2021

The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 300 + 4Q. What is the average variable cost? a. 300 b. 4Q c. 4 d. 300/0.

Expert Solution

Answer

c .

Explanation

Computation of Average Variable Cost:

Variable cost is the cost that varies with quantity of output. Variable cost is dependent on output (Q).

Given,

TC = 300 + 4Q

Here,

Total Fixed Cost = 300

Total Variable Cost = 4Q

Average Variable Cost = Total Variable Cost / Quantity = 4Q/Q = 4

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