Q366
A frim has variable cost of Rs.1000 at 5 units of output. If fixed costs are Rs.400, what will be the average total cost at 5 units of output?
A.
380
B.
280
AnswerC.
60
D.
400
Answer: Option B
Solution
Answer: Option B
Solution:
Total costs (TC) = FC + TVC. Average Fixed Costs (AFC) = FC/Q.
TC = 400+1000 = 1400.
AFC = 1400/5 = 280.