If the firm produces 200,000 toothbrushes, its total cost is 300,00 and total variable cost is 200,000, what is the average fixed cost?
A) $0.50 per unit
B) $1.00 per unit
C) $1.50 per unit
D) $2.00 per unit

Question

Quizplus · Accepted Answer

The average fixed cost is calculated by subtracting the total variable cost from the total cost and then dividing by the number of units produced. Here, it's (300,000 - 200,000) / 200,000 = 100,000 / 200,000 = $0.50 per unit.

If the Firm Produces 200,000 Toothbrushes, Its Total Cost Is