Suppose a firm is producing 250 units of output.At this level of output,average fixed costs are $20 per unit and average variable costs are $80 per unit.It can be concluded that total cost is
A)$100.
B)$0.40 per unit.
C)$40 per unit.
D)$2500.
E)$25 000.

Question

Quizplus · Accepted Answer

Total cost is calculated by adding total fixed costs and total variable costs. Total fixed costs are 250 units * $20 = $5000, and total variable costs are 250 units * $80 = $20000. Therefore, total cost is $5000 + $20000 = $25000.

Suppose a Firm Is Producing 250 Units of Output