Question

If total cost of producing 20 units of output is​ $1,000 and average variable cost is​ $35, what is the​ firm's average fixed cost at that level of​ output?

Answer 1

The correct answer is $15

Step-by-step explanation:

Units = 20

Total Cost = $1,000

Average variable cost= $35

$1000 ÷ 20 (units) = $50 total cost per unit

$50(Total cost per unit) - $35(Average variable cost) = $15 average fixed cost