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Suppose the firm is producing 150 units of output and its fixed cost is $975. Then its average variable cost amounts to?

User Justin Love
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1 Answer

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17 votes

Final answer:

The average variable cost cannot be calculated based on the given information.

Step-by-step explanation:

The average variable cost is calculated by dividing the variable cost by the total output.

In this case, we are given that the firm is producing 150 units of output and its fixed cost is $975.

Since the fixed cost is not included in the variable cost, we can calculate the average variable cost as follows:

Average Variable Cost = Variable Cost / Total Output

The fixed cost does not affect the average variable cost, so we only need to consider the variable cost.

Since we are not given the variable cost, we cannot calculate the average variable cost based on the given information.

We would need more data to accurately determine the average variable cost.

User Jelhan
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