If an eyeglass business produces 10 pairs of eyeglasses and incurs $35 in average total cost and $5 in average fixed cost, then average variable cost is:
A)$30.
B)$35.
C)$50.
D)$300.

Question

Quizplus · Accepted Answer

Using the formula for average total cost, we have:
ATC = Total Cost / Quantity = (Average Fixed Cost + Average Variable Cost) / Quantity
$35 = $5 + AVC / 10
AVC = $30. Therefore, the answer is (A) $30.

If an Eyeglass Business Produces 10 Pairs of Eyeglasses and Incurs