An economist is looking at the cost structure of a firm. She sees that at an out

ID: 1173356 • Letter: A

Question

An economist is looking at the cost structure of a firm. She sees that at an output level of 10,000 units, total costs equal $300,000. Fixed costs are known to be $200,000. From this information it can be concluded that

A. Average variable costs at an output level of 10,0000 units are the same as when output equals zero. B. Total Variable costs at an output of 10,000 units are $100,000 C. Average Fixed costs are zero when 10,000 units are produced. D. Total Variable costs at an output of 15,100 units are $50,000

Explanation / Answer

Total Cost = Total Fixed Cost + Total Variable Cost

300000 = 200000 + 100000

b) TVC at output of 10000 units is the correct answer.

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An economist is looking at the cost structure of a firm. She sees that at an out

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