Answered

Find the best answers to your questions with the help of IDNLearn.com's knowledgeable users. Ask your questions and receive reliable, detailed answers from our dedicated community of experts.

The Total Fixed Cost for this scenario is [tex]$\$[/tex]500[tex]$.

\begin{tabular}{|l|l|}
\hline
Output & Total Variable Cost \\
\hline
1 & $[/tex]\[tex]$400$[/tex] \\
\hline
2 & [tex]$\$[/tex]720[tex]$ \\
\hline
3 & $[/tex]\[tex]$1,000$[/tex] \\
\hline
4 & [tex]$\$[/tex]1,400[tex]$ \\
\hline
5 & $[/tex]\[tex]$2,000$[/tex] \\
\hline
6 & [tex]$\$[/tex]3,600[tex]$ \\
\hline
\end{tabular}

Refer to the above table. The average variable cost of the firm when 5 units of output are produced is:

A. $[/tex]\[tex]$300$[/tex]

B. [tex]$\$[/tex]100[tex]$

C. $[/tex]\[tex]$200$[/tex]

D. [tex]$\$[/tex]400$

Sagot :

GinnyAnsweridn
To determine the average variable cost (AVC) when 5 units of output are produced, we need to use the following formula:

[tex]\[ \text{AVC} = \frac{\text{Total Variable Cost}}{\text{Output}} \][/tex]

From the table, we see that the Total Variable Cost (TVC) for producing 5 units is [tex]$2000. Using the formula: \[ \text{AVC} = \frac{\$[/tex]2000}{5} \]

Performing the division:
[tex]\[ \text{AVC} = \$400 \][/tex]

So, the average variable cost of the firm when 5 units of output are produced is:

[tex]\[ \$400 \][/tex]

Among the given options:
- \[tex]$300 - \$[/tex]100
- \[tex]$200 - \$[/tex]400

The correct answer is:
[tex]\[ \$400 \][/tex]
Your presence in our community is highly appreciated. Keep sharing your insights and solutions. Together, we can build a rich and valuable knowledge resource for everyone. IDNLearn.com is your source for precise answers. Thank you for visiting, and we look forward to helping you again soon.