Asked by Logan Sisson on Jul 07, 2024
Verified
Answer the question on the basis of the following cost data for a purely competitive seller: Total Total Fixed Output Cost 0$50150250350450550650 Total Variable Total Cost Cost $0$5070120120170150200220270300350390440\begin{array}{ccc}\begin{array}{c}&\text { Total } \\\text { Total }&\text { Fixed } \\\text { Output }&\text { Cost }\\\hline0&\$50\\1 & 50 \\2 & 50 \\3 & 50 \\4 & 50 \\5 & 50 \\6 & 50\end{array}\begin{array}{cc}\text { Total } &\\\text { Variable }&\text { Total } \\\text { Cost }&\text { Cost }\\\hline\$ 0 & \$ 50 \\70 & 120 \\120 & 170 \\150 & 200 \\220 & 270 \\300 & 350 \\390 & 440\end{array}\end{array} Total Output 0123456 Total Fixed Cost $50505050505050 Total Variable Cost $070120150220300390 Total Cost $50120170200270350440 Refer to the data.At 5 units of output,average fixed cost,average variable cost,and average total cost are:
A) $10,$60,and $70 respectively.
B) $50,$40,and $90 respectively.
C) $10,$70,and $80 respectively.
D) $5,$25,and $30 respectively.
Average Fixed Cost
Unchanging production costs relative to output levels, per unit of output produced.
Average Variable Cost
The total variable cost divided by the quantity of output, representing the variable cost per unit of output.
Average Total Cost
The average total cost (ATC) is an economic concept that calculates the total cost of producing a good or service divided by the quantity of output produced. It is used to determine the per-unit cost of production.
- Understand the association between various cost structures (including fixed, variable, and total costs) and their impact on pricing strategies within competitive enterprises.
Verified Answer
YO
Yasser OwidahJul 09, 2024
Final Answer :
A
Explanation :
At 5 units of output, the average fixed cost (AFC) is calculated as total fixed cost divided by the quantity of output, which is $50 / 5 = $10. The average variable cost (AVC) is the total variable cost divided by the quantity of output, which is $300 / 5 = $60. The average total cost (ATC) is the total cost divided by the quantity of output, which is $350 / 5 = $70.
Learning Objectives
- Understand the association between various cost structures (including fixed, variable, and total costs) and their impact on pricing strategies within competitive enterprises.