Assume the following total cost schedule for a perfectly competitive firm. $$\begin{array}{l}
\begin{array} { | l | l | l | }
\hline \text { Output } & \text { TVC } & \text { TFC } \
\hline 0 & 0 & 100 \
\hline 1 & 40 & 100 \
\hline 2 & 70 & 100 \
\hline 3 & 120 & 100 \
\hline 4 & 180 & 100 \
\hline 5 & 250 & 100 \
\hline 6 & 330 & 100 \
\hline
\end{array}\
\text { TABLE 9- } 2
\end{array}$$
-Refer to Table 9- 2. If the firm is producing at an output level of 2 units, the ATC is _ and the AVC is _ .
A) $85; $35
B) $100; $70
C) $70; $35
D) $50; $50
E) $140; $40

Question

Assume the following total cost schedule for a perfectly competitive firm. $$\begin{array}{l}
\begin{array} { | l | l | l | } 
\hline \text { Output } & \text { TVC } & \text { TFC } \
\hline 0 & 0 & 100 \
\hline 1 & 40 & 100 \
\hline 2 & 70 & 100 \
\hline 3 & 120 & 100 \
\hline 4 & 180 & 100 \
\hline 5 & 250 & 100 \
\hline 6 & 330 & 100 \
\hline
\end{array}\
\text { TABLE 9- } 2
\end{array}$$
-Refer to Table 9- 2. If the firm is producing at an output level of 2 units, the ATC is _ and the AVC is _ .
A) $85; $35
B) $100; $70
C) $70; $35
D) $50; $50
E) $140; $40

Quizplus · Accepted Answer

The ATC is calculated by dividing the total cost by the output level. At an output level of 2 units, the total cost is $170 (TVC of $70 + TFC of $100). Therefore, the ATC is $170 / 2 = $85. The AVC is calculated by dividing the variable cost by the output level. At an output level of 2 units, the variable cost is $70. Therefore, the AVC is $70 / 2 = $35.

Assume the Following Total Cost Schedule for a Perfectly Competitive