A firm produces 200 units of output at a total cost of $1,000. The firm's total fixed cost equals $200.The firm's per-unit average variable cost is _____.

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Quizplus · Accepted Answer

The firm's total variable cost (TVC) is calculated by subtracting total fixed cost (TFC) from total cost (TC), which is $1,000 - $200 = $800. The per-unit average variable cost (AVC) is then TVC divided by the quantity of output, which is $800 / 200 = $4.

A Firm Produces 200 Units of Output at a Total