If a firm has an average total cost of $55 and an average fixed cost of $10 for producing five units of output, then the total variable cost will be:
A) $550.
B) $525.
C) $225.
D) $65.

Question

Quizplus · Accepted Answer

The average total cost (ATC) is the sum of average fixed cost (AFC) and average variable cost (AVC). Given ATC is $55 and AFC is $10, AVC is $45. Total variable cost (TVC) is AVC multiplied by the quantity of output, so TVC = $45 * 5 = $225.

If a Firm Has an Average Total Cost of $55