This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8
a. What is the total cost?
b. What is the total fixed cost?
c. What is the average fixed cost?
d. What is the average variable cost?
a. Total cost can be calculated as average total cost times output, which is $8 × 100 = $800.
b. Total fixed cost equals total cost minus total variable cost. The total cost from part (a) is $800. The total variable cost is $500. Therefore the total fixed cost is $800 - $500 = $300.
c. Average fixed cost equals total fixed cost divided by output, which is $300 ÷ 100 = $3.
d. Average variable cost equals total variable cost divided by output. The total variable cost from part (b) is $500, so the average variable cost is $500 ÷ 100 = $5.
You might also like to view...
Wages in the United States are higher than wages in China primarily because
a. worker productivity is higher in the United States. b. in the United States, less capital is required per employee. c. China has more natural resources that employees can work with. d. the United States has more people and, therefore, a larger number of skilled workers.
The following data represent a personal income tax schedule. Answer the question on the basis of this information. Refer to the below table. If income increases from $15,000 to $30,000, the marginal tax rate is:
A. 10.0 percent
B. 13.3 percent
C. 18.3 percent
D. 26.6 percent