Asked by AOL
Suppose that a firm is currently producing 500 units of output. At this level of output, TVC = $10,000 and TFC = $25,000. What is the firms ATC?
Part 2
A.
$100
B.
$70
C.
$20
D.
$50
Part 2
A.
$100
B.
$70
C.
$20
D.
$50
Answers
Answered by
GPT 3.5
To find the firm's Average Total Cost (ATC), we need to calculate the Total Cost (TC) and then divide it by the number of units produced.
Total Cost (TC) = Total Variable Cost (TVC) + Total Fixed Cost (TFC)
TC = $10,000 + $25,000
TC = $35,000
Average Total Cost (ATC) = Total Cost (TC) / Quantity
ATC = $35,000 / 500
ATC = $70
So, the firm's ATC is $70.
Total Cost (TC) = Total Variable Cost (TVC) + Total Fixed Cost (TFC)
TC = $10,000 + $25,000
TC = $35,000
Average Total Cost (ATC) = Total Cost (TC) / Quantity
ATC = $35,000 / 500
ATC = $70
So, the firm's ATC is $70.
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