The table given below shows the total fixed and variable costs of a firm. Table 21.3
In Table 21.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.

Question

The table given below shows the total fixed and variable costs of a firm. Table 21.3
 In Table 21.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.

Quizplus · Accepted Answer

Average fixed cost is calculated by dividing total fixed cost by the quantity produced. 
For the first unit of output, the total fixed cost is $40, therefore the average fixed cost is $40÷1 = $40.
For producing 8 units of output, the total fixed cost is still $40, therefore the average fixed cost is $40÷8 = $5.
So, the correct answer is B.

The Table Given Below Shows the Total Fixed and Variable