Table 13-8

-Refer to Table 13-8.What is the average total cost of producing 6 gigaplots at Jimmy's Gigaplot factory?

Question

Table 13-8
 
-Refer to Table 13-8.What is the average total cost of producing 6 gigaplots at Jimmy's Gigaplot factory?

Quizplus · Accepted Answer

The average total cost for producing 6 gigaplots can be found by looking at the row where Q=6, which is the fourth row. The total cost for producing 6 gigaplots is $143.67 and the corresponding total variable cost is $99.00. Therefore, the average total cost is (143.67/6) = $22.61. However, we must remember that this cost includes fixed costs. To find the cost only accounting for variable costs, we must subtract fixed costs which is $77.50. So, the average variable cost is (99/6) = $16.50. Finally, we can calculate the average total cost by adding the average variable cost and the fixed cost per unit, which is $22.17 ((16.50)+(77.50/6)). Therefore, the best answer is (C).

Table 13-8 -Refer to Table 13-8.What Is the Average Total Cost of Average