With fixed costs of $200,a firm has average total costs of $5 and average variable costs of $3.Its output is:
A)100 units.
B)40 units.
C)66.67 units.
D)Need more information

Question

Quizplus · Accepted Answer

Average total cost (ATC) is the sum of average fixed cost (AFC) and average variable cost (AVC). Given ATC = $5 and AVC = $3, AFC = $2. Fixed costs are $200, so output = Fixed Costs / AFC = $200 / $2 = 100 units.

With Fixed Costs of $200,a Firm Has Average Total Costs