Final answer:
The question involves calculating fixed cost per unit by dividing the total fixed costs by the number of units produced. It relates to business concepts such as fixed costs, variable costs, and total costs in production, as well as understanding the per-unit cost measures and production technology.
Step-by-step explanation:
The referenced question is asking for an understanding of cost concepts in business and economics, specifically within the context of a company's production costs. At zero production, the fixed costs stand at $160, and these costs do not change as production levels vary. To find the fixed cost per unit, one would divide the total fixed costs by the production level of units. Variable costs change with the level of production, and together with fixed costs, they add up to total costs. As shown in Figure 7.7, the total cost is the sum of fixed and variable costs and this relationship is graphically represented with the total cost curve. The vertical intercept of this curve represents the fixed costs.
When costs are analyzed on a per-unit basis, we refer to fixed costs per unit, average cost, average variable cost, and marginal cost. Production technology refers to the methods and processes used to produce goods and services. Knowing how to calculate and interpret these costs is key to making informed business decisions.