Answer:
The average fixed cost of production per unit is $12. So, option C is the right answer.
Step-by-step explanation:
The total cost is made up of the sum of all the costs. We can say that the total cost equals total fixed costs plus total variable cost.
Total cost = Total Fixed costs + Total variable costs
1000 = Total Fixed costs + 700
1000 - 700 = Total Fixed costs
Total Fixed costs = $300
The total fixed cost is the cost that remains constant in the short run at every production level. The average fixed cost is the total fixed cost divided by the number of units. The average fixed cost falls as the output rises.
Average Fixed cost per unit at 25 units = 300 / 25 = $12 per unit