Question

3.33 pts Firm X's total fixed costs are $1,000. Its total variable costs of producing 100 units are $2,000, and its total variable costs of producing 200 units are $4,000. What are its average costs of producing 100 and 200 units of output? $30 and $25 $25 and $30 $10 and $5 $20 and $20

Answer 1

Firm X's average costs for producing 100 units of output is $30 per unit and for producing 200 units is $25 per unit, calculated by summing the average fixed and variable costs.

Step-by-step explanation:

To determine the average costs of production for Firm X at 100 units and 200 units of output, we must calculate both the average fixed costs (AFC) and the average variable costs (AVC), and then sum these to find the average total costs (ATC).

For 100 units of output, the fixed costs are $1,000, and the variable costs are $2,000. The average fixed cost is $1,000 / 100 units = $10 per unit. The average variable cost is $2,000 / 100 units = $20 per unit. Adding these together, the average total cost is $10 + $20 = $30 per unit.

For 200 units of output, the fixed costs remain at $1,000 and the variable costs are $4,000. The average fixed cost is then $1,000 / 200 units = $5 per unit. The average variable cost is $4,000 / 200 units = $20 per unit. Adding these up, the average total cost is $5 + $20 = $25 per unit.

Therefore, the average costs of producing 100 units is $30 per unit and for 200 units is $25 per unit.