If average total cost is $50 and average fixed cost is $15 when output is 20 units, what is the firm's total variable cost at that level of output?
A)$1000.
B)$700.
C)$300.
D)impossible to determine without additional information.

Question

Quizplus · Accepted Answer

Average total cost = Total cost / Output
$50 = Total cost / 20 units
Total cost = $1000
Average fixed cost = Total fixed cost / Output
$15 = Total fixed cost / 20 units
Total fixed cost = $300
Total variable cost = Total cost - Total fixed cost
Total variable cost = $1000 - $300
Total variable cost = $700

If Average Total Cost Is $50 and Average Fixed Cost