Question

At the end of the​ year, a firm produced 20 comma 000

laptop computers. Its total costs were ​$8

​million, and its fixed costs were ​$5

million.
Part 2
What are the average variable costs of this​ firm?

Answer 1

To find the average variable costs of the firm, we need to subtract the fixed costs from the total costs and then divide by the number of laptop computers produced.

Total variable costs = Total costs - Fixed costs = $8 million - $5 million = $3 million

Average variable costs = Total variable costs / Number of laptop computers produced = $3 million / 20,000 = $150 per laptop computer.