The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average fixed cost?
A) 500
B) 5Q
C) 5
D) 5 + (200/Q)
E) none of the above

Question

Quizplus · Accepted Answer

The average fixed cost (AFC) is the total fixed cost (TFC) divided by the quantity (Q). Here, TFC is 200, so AFC = 200/Q, which is not listed among the options.

The Total Cost (TC) of Producing Computer Software Diskettes (Q)