A firm is producing 100 racing bicycles at a total cost of $84,000. The firm's fixed cost is $24,000. What is the average variable cost?

a. $840
b. $640
c. $600
d. $240

Ans: c. $600

Economics

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As healthy people leave an insurance pool, premiums rise, which cause more people to leave the pool and even higher premiums. This describes

A) moral hazard. B) the reversibility paradox. C) irrational pricing. D) a premium death spiral.

Economics

The price elasticity of demand measures the responsiveness of

A) supply to demand changes. B) equilibrium changes. C) quantity demanded to changes in the price. D) demand to supply changes. E) the price to changes in quantity demanded.

Economics