The following table shows the total output, number of workers employed, variable costs, and fixed costs of a firm.

-Refer to the table above.What is the average total cost of producing 160 units of the good?

Question

The following table shows the total output, number of workers employed, variable costs, and fixed costs of a firm.
 
-Refer to the table above.What is the average total cost of producing 160 units of the good?

Quizplus · Accepted Answer

To calculate the average total cost, we need to use the formula:

Average total cost = (Total fixed costs + Total variable costs) / Quantity Produced

For producing 160 units, the total variable costs would be the sum of column 3 for the rows where the quantity produced is 160, which is $160. The total fixed cost is $120.

So, 
Average total cost = (120 + 160) / 160 = $1.44

Therefore, the correct answer is (C) $1.44.

The Following Table Shows the Total Output, Number of Workers