If a firm has an average total cost of $55 and an average fixed
Cost of $10 for producing 5 units of output, then the total
Variable cost will be:
A)$550.
B)$525.
C)$225.
D)$65.

Question

Quizplus · Accepted Answer

The average total cost (ATC) is the sum of average fixed cost (AFC) and average variable cost (AVC). Given ATC = $55 and AFC = $10, AVC = $55 - $10 = $45. For 5 units, total variable cost (TVC) = AVC * quantity = $45 * 5 = $225.

If a Firm Has an Average Total Cost of $55