Refer to the information provided in Figure 8.3 below to answer the question(s) that follow. Figure 8.3
-Refer to Figure 8.3. If the total fixed cost is $50, then average total cost of producing 10 basketballs is
A) $3.
B) $5.
C) $8.
D) $80.

Question

Refer to the information provided in Figure 8.3 below to answer the question(s) that follow.  Figure 8.3
-Refer to Figure 8.3. If the total fixed cost is $50, then average total cost of producing 10 basketballs is
A) $3. 
B) $5. 
C) $8. 
D) $80.

Quizplus · Accepted Answer

The average total cost (ATC) is calculated by dividing the total cost by the quantity produced. If the total fixed cost is $50 and we assume variable costs increase with production, the total cost to produce 10 basketballs includes the fixed cost of $50 plus the variable costs. Without specific variable costs provided, we estimate the total cost. Given the ATC is sought for 10 units, and only option C provides a plausible ATC value per unit when considering a fixed cost of $50 spread across 10 units (since $50/10 = $5, and the ATC must be higher to account for variable costs), option C is the logical choice despite the lack of explicit variable cost information.

Refer to the Information Provided in Figure 8