If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:
A) $30.
B) $35.
C) $50.
D) $300.

Question

Quizplus · Accepted Answer

Average total cost (ATC) is the sum of average variable cost (AVC) and average fixed cost (AFC). Thus, ATC = AVC + AFC. 
In this case, AVC = $30 and AFC = $5. 
So, ATC = $30 + $5 = $35. 
Therefore, the answer is B.

If a Firm Produces 10 Units of Output and Incurs