The Sunshine Corporation Finds Its Costs Are $40 When It

The Sunshine Corporation finds its costs are $40 when it produces no output.Its total variable costs (TVC) change with output as shown in the accompanying table. Refer to the above information.The average total cost of 3 units of output is:

A) $65.
B) $21.67.
C) $40.
D) $35.
Total costs are the sum of fixed costs and variable costs.At 3 units of output,total costs are $105,so average total costs are $105/3 = $35.