Question

The average total cost of producing electronic calculators in a factory is $20 at the current output level of 100 units per week. If fixed cost is $1,000 per week:_____a. average variable cost is $10. b. variable cost is $2,000. c. total cost is $3,000. d. average fixed cost is $20.

Answer 1

The average variable cost is $10, obtained by subtracting the fixed cost of $1,000 from the total cost of $2,000 and dividing the result by the number of units produced (100 calculators).

Step-by-step explanation:

The student's question pertains to the calculation of different costs associated with the production of electronic calculators. Specifically, the question involves understanding total costs, fixed costs, and variable costs, as well as how these relate to average total cost and average fixed cost.

If the average total cost (ATC) for producing 100 units is $20 and the fixed cost (FC) is $1,000, we can calculate the total cost (TC) as ATC multiplied by the number of units. Therefore, TC = $20 * 100 = $2,000. Since TC is the sum of fixed cost and variable cost (VC), we can also determine VC by subtracting FC from TC, which results in VC = $2,000 - $1,000 = $1,000. To find the average variable cost (AVC), we divide VC by the number of units, yielding AVC = $1,000 / 100 = $10. Thus, the correct answer to the student's question is that the average variable cost is $10. Given the provided numbers, neither the variable cost is $2,000, the total cost is $3,000, nor is the average fixed cost $20.

Answer 2

C. total cost is $3000

Step-by-step explanation:

Fixed cost is $1000 no matter what per week.

Your output is 100 units, average cost to produce each is $20.

so 100 * $20 = $2,000

total cost is $3000

hope this helps