At its current short-run level of production, a firm's average variable costs equal $25 per unit,...
At its current short-run level of production, a firm's average variable costs equal $25 per unit, and its average fixed costs equal $20 per unit. Its total costs at this production level equal $900.
a. What is the firms current output level?
B What are its total variable costs at this level?
c. What are its total fixed costs?
Homework Answers
a) If the average variable cost of the firm is $25 and the average fixed cost in the market is $20 then in that case total average cost will be $45. total output will be $900 / $45 = 20. The firms is currently producing 20 unit of goods in the market.
b) Total variable cost will be $25 x 20 = $500
c) total fixed cost will be $20 x 20 = $400. And hence the total cost of the firm will be $900.
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At its current short-run level of production, a firm's
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