Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
TABLE 9-3
-Refer to Table 9-3.If this firm were producing at an output level of 30 units,the AFC would be ________ and the AVC would be ________.

Question

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
  TABLE 9-3
-Refer to Table 9-3.If this firm were producing at an output level of 30 units,the AFC would be ________ and the AVC would be ________.

Quizplus · Accepted Answer

To find AFC and AVC, we need to use the formulas:
AFC = total fixed cost/output
AVC = total variable cost/output

At an output level of 30 units, the total cost is $11.50. We can break this down into total fixed cost and total variable cost using the information given in the table:
Total fixed cost = $5
Total variable cost = $6.50

Plugging these values into the formulas:
AFC = $5/30 = $0.17
AVC = $6.50/30 = $0.20

Therefore, the answer is C, with AFC of $0.17 and AVC of $0.20.

Consider the Following Total Cost Schedule for a Perfectly Competitive