If the total cost of producing 20 units of output is $1000 and the average variable cost is $35, the firm's average fixed cost at that level of output is
A)$65
B)$50
C)$15
D)It is impossible to determine without additional information.

Question

Quizplus · Accepted Answer

The total cost is $1000, and the average variable cost for 20 units is $35, so the total variable cost is 20 * $35 = $700. The total fixed cost is the total cost minus the total variable cost, which is $1000 - $700 = $300. The average fixed cost is the total fixed cost divided by the number of units, which is $300 / 20 = $15.

If the Total Cost of Producing 20 Units of Output