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 fixed cost of 3 units of output is:

A) $13.33.
B) $12.50.
C) $40.
D) $18.50.
At 3 units of output,total fixed costs are $40,so average fixed cost is $40/3 = $13.33.