If total costs are $20,000 at an output of 1000 units and $35,000 at an output of 2,500 units, and variable costs are $10 per unit, total fixed costs are:

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Quizplus · Accepted Answer

Total fixed costs can be calculated by subtracting total variable costs from total costs at any given level of output. Variable costs at 1000 units are $10,000 (1000 units * $10/unit). Subtracting this from the total costs at 1000 units ($20,000) gives total fixed costs of $10,000.

If Total Costs Are $20,000 at an Output of 1000