Assume that in the short run a firm is producing 100 units of output, has average total costs of $200, and has average variable costs of $150. The firm's total fixed costs are.
A)$5,000.
B)$500.
C)$0.50.
D)$50.

Question

Quizplus · Accepted Answer

Total fixed costs can be calculated by subtracting total variable costs from total costs. Total costs are ATC * Quantity = $200 * 100 = $20,000. Total variable costs are AVC * Quantity = $150 * 100 = $15,000. Therefore, total fixed costs = $20,000 - $15,000 = $5,000.

Assume That in the Short Run a Firm Is Producing