28.03.2023 - 03:22

The average total cost of producing laptop computers in a factory is $500 at the current output level of 100 units per week. If fixed costs equal $10,000,: a) average fixed cost equals $10,000. b) total cost equals $60,000 per week. c) variable cost equal

The average total cost of producing laptop computers in a factory is $500 at the current output level of 100 units per week. If fixed costs equal $10,000,:

a) average fixed cost equals $10,000.

b) total cost equals $60,000 per week.

c) variable cost equals $50,000 per week.

d) average variable cost equals $400.

Answers (1)
  • Alex-Fresh
    April 7, 2023 в 03:41

    The correct answer is (b) total cost equals $60,000 per week.

    Explanation:

    The average total cost (ATC) of producing laptop computers in a factory is $500 at the current output level of 100 units per week. This means that the total cost (TC) of producing 100 units per week is:

    TC = ATC x Q

    where Q is the quantity of output, which is 100 units per week.

    Thus, the total cost of producing 100 units per week is:

    TC = $500 x 100 = $50,000

    In addition, we are given that fixed costs equal $10,000. Fixed costs are the costs that do not vary with the level of output. Therefore, they remain constant regardless of the number of units produced.

    So, the total cost of producing 100 units per week, including fixed costs, is:

    Total cost = Fixed costs + Variable costs

    Total cost = $10,000 + $50,000 = $60,000

    Hence, the correct answer is (b) total cost equals $60,000 per week.

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