If a firm has a total fixed cost of $75 and an average variable cost of...

If a firm has a total fixed cost of $75 and an average variable cost of $35 for producing 10 units of output, the average total cost would be:

If a firm has an average total cost of $55 and an average fixed cost of $10 for producing 5 units of output, then the total variable cost will be:

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Expert Solution

a) Total variable cost of producing 10 units of goods = 10 x $35 = $350.

Total fixed cost = $75.

The total cost of producing 10 unis of goods = $350 + $75 = $425.

The average total cost will be $425 / 10 = $42.5 is the average total cost.

b) The total cost of the firm for producing 5 units = $55 x 5 = $275

Total fixed cost = $10.

Total Variable cost = Total cost - Fixed cost

= $275 - $10 = $265 is the total variable cost of the firm.

Rahul Sunny answered 1 year ago

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