Suppose the total cost of producing 10,000 tennis balls is $30,000 and the fixed cost is $10,000. a. What is the variable cost of producing 10,000 tennis balls? b. When output is 10,000 balls, what is the average variable cost? c. When output is 10,000 ba

a. The variable cost of producing 10,000 tennis balls is $20,000. This can be calculated by subtracting the fixed cost of $10,000 from the total cost of $30,000. b. When output is 10,000 balls, the average variable cost is $2 per ball. This can be calculated by dividing the variable cost of $20,000 by 10,000 balls. c. When output is 10,000 balls, the average fixed cost is $1 per ball. This can be calculated by dividing the fixed cost of $10,000 by 10,000 balls. d. The dollar difference between the average total cost and the average variable cost is greater when the output is 10,000 tennis balls. This is because as output increases, fixed costs are spread over a larger number of units, which reduces the average fixed cost. Therefore, the difference between average total cost (which includes fixed costs) and average variable cost (which excludes fixed costs) is smaller at higher levels of output.