Question

Miller technologies has average variable costs of $6 and average total costs of $10 when it produces 1,000 units of output. the firm's total fixed costs equal

Answer 1

Given: -
Average variable cost/unit = $6
Average total cost/unit = $10
Units = 1000
To find: - Total fixed cost.
Solution:
Fixed cost = Total cost – Variable cost
Fixed cost = $10 - $6
Fixed cost = $4 = fixed cost per unit
Total fixed cost = $4*1000 =$4,000 Firm's total fixed cost is $4,000.