Question

Figure and Table: Variable, Fixed, and Total Costs Total cost $2,500 Total cost, TC 2,000 1,500 1,000 500 F D E A B C 20 40 60 80 100 Quantity of wheat (bushels) Points on Graph Quantity of Labor (workers), L. Quantity of Wheat (bushels). Variable ariable Cost. VC Fixed Cost, FC $400 400 400 400 DOWN Total Cost, TC = FC + VC 400 600 800 1.000 1,200 1.400 1,600 1.800 2.000 400 400 12) (Figure and Table: Variable, Fixed, and Total Costs) Use Figure and Table: Variable, Fixed, and Total Costs. When 51 bushels of wheat is produced, the average fixed cost is , average variable cost is , and average total cost is A) $7.84; $11.76; $19.60 B) $133.33; $200.00; $333.33 C) $400.00; $600.00; $1,000.00 D) $5.33; $13.33; $18.67

Answer 1

Answer : The answer is option A.

When quantity of wheat is 51 bushels then fixed cost is $400, variable cost is $600 and total cost is $1,000. So, in case of 51 bushels of wheat,

Average fixed cost = Fixed cost / Quantity = 400 / 51 = $7.84

Average variable cost = Variable cost / Quantity = 600 / 51 = $11.76

Average total cost = Total cost / Quantity = 1000 / 51 = $19.60

Therefore, option A is correct.