If a firm has a total fixed cost of $75 and an average variable
Cost of $35 for producing 10 units of output, the average total
Cost would be:
A)$425.
B)$42.50.
C)$110.
D)$350.

Question

Quizplus · Accepted Answer

The average total cost (ATC) is calculated by adding the average fixed cost (AFC) and the average variable cost (AVC). The total fixed cost is $75, so the AFC for 10 units is $75/10 = $7.5. The AVC is $35. Therefore, ATC = AFC + AVC = $7.5 + $35 = $42.50.

If a Firm Has a Total Fixed Cost of $75