The figure given below shows the average fixed cost (AFC)and the average variable cost (AVC)curves of a competive firm. Figure 7.1 Using Figure 7.1 determine the average total cost of producing the first unit of the output.

Question

The figure given below shows the average fixed cost (AFC)and the average variable cost (AVC)curves of a competive firm. Figure 7.1  Using Figure 7.1 determine the average total cost of producing the first unit of the output.

Quizplus · Accepted Answer

To calculate the average total cost (ATC) of producing the first unit of output, we need to add the average fixed cost (AFC) and the average variable cost (AVC) together. From the graph, we can see that AFC is $30 and AVC is $10. Therefore, ATC is:

ATC = AFC + AVC
ATC = $30 + $10
ATC = $40

Hence, the correct answer is D) $40.

The Figure Given Below Shows the Average Fixed Cost (AFC)and