A firm is producing 1,000 units of output for which the average variable cost of production equals 50 cents.The firm's total fixed costs equal $700.The total cost of producing 1,000 units of output equals:

Question

Quizplus · Accepted Answer

Total cost = Total fixed cost + Total variable cost
Total variable cost = Average variable cost x Quantity of output

Total variable cost = 50 cents x 1,000 units = $500

So,

Total cost = $700 + $500 = $1,200

Therefore, the correct answer is D.

A Firm Is Producing 1,000 Units of Output for Which