What is the formula for calculating average fixed cost? If a firm has fixed costs of $8,500 per month and produces 1,900 units of output per month, what is its average fixed cost?
What will be an ideal response?
Average fixed cost is equal to total fixed cost divided by the number of units of output. Therefore, the firm's average fixed cost would be equal to $8,500/1,900 = $4.47.
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The reason why economists do not use experimental data more frequently is for all of the following reasons except that real-world experiments
A) cannot be executed in economics. B) with humans are difficult to administer. C) are often unethical. D) have flaws relative to ideal randomized controlled experiments.
Under rate-of-return regulation, average cost pricing
A) is inflated so the firm can make economic profits. B) includes variable costs but not a cost for capital. C) includes what they consider to be a fair rate of return on investment. D) includes a cost for capital that generates an above normal rate of return.