The table given below shows the average total cost of production of a firm at different levels of the output. Table 21.5
In Table 21.5, if the total fixed cost is $3, what is the total variable cost of producing 5 units?

Question

The table given below shows the average total cost of production of a firm at different levels of the output. Table 21.5
 In Table 21.5, if the total fixed cost is $3, what is the total variable cost of producing 5 units?

Quizplus · Accepted Answer

To calculate the total variable cost of producing 5 units, we need to first find the variable cost per unit. This can be done by subtracting the total fixed cost from the average total cost at 5 units of output: 
Variable cost per unit = Average total cost at 5 units - Total fixed cost
Variable cost per unit = $10 - $3 = $7
Therefore, the total variable cost of producing 5 units is:
Total variable cost = Variable cost per unit × Number of units produced
Total variable cost = $7 × 5 = $35
Hence, the best choice is B, $32, as it is the closest option to our calculated answer of $35.

The Table Given Below Shows the Average Total Cost of Production