A factory produces 1,000 radios a year, AVC = $10 and TFC = $5,000.The factory's TC
A)equals $15.
B)equals $5,005.
C)equals $15,000.
D)cannot be determined from the information given.

Question

Quizplus · Accepted Answer

Total Cost (TC) is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC). TVC can be found by multiplying the Average Variable Cost (AVC) by the quantity produced. Here, TVC = $10 * 1,000 = $10,000. Adding TFC ($5,000) gives TC = $15,000.

A Factory Produces 1,000 Radios a Year, AVC = $10