The Sunshine Corporation Finds That Its Costs Are $40 When

The Sunshine Corporation finds that its costs are $40 when it produces no output. Its total variable costs (TVC) change with output as shown in the accompanying table. Use this information to answer the following question. $\begin{array}{|c|c|}\hline \text { Output } & \text { TVC } \\\hline 1 & \$ 30 \\\hline 2 & 50 \\\hline 3 & 65 \\\hline 4 & 85 \\\hline 5 & 110 \\\hline\end{array}$ The average fixed cost of 3 units of output is

A) $13.33.
B) $12.50.
C) $40.
D) $18.50.