With the highly anticipated release of the latest Star Wars film, fans wish to r

Question

With the highly anticipated release of the latest Star Wars film, fans wish to relive the glory of the previous movies. As a result, a perfectly competitive market for Star Wars DVD box sets has formed. George is a producer in this market, and has total fixed costs of $180. Other data relating to costs and output are shown in the table below: QuantityAverage Total Cost (box sets)ATC (S/box set) 10 20 30 40 50 23.5 14 10.40 10.50 10.70 Using this information, calculate what quantity George needs to produce so that his average variable cost is $7.10 per box set? Answer to the nearest whole number (with no decimal places).

Explanation / Answer

Answer:-

Q ATC AFC AVC TFC 0 180 10 23.5 18 5.5 180 20 14 9 5 180 30 10.4 6 4.4 180 40 10.5 4.5 6 180 50 10.7 3.6 7.1 180 So, George needs to produce 50 units so that his variable cost is $7.10

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