Question

if a firm produces 20 units of output and incurs a total cost of $1,000and the variable cost is$7,00,calculate the firm's average fixed cost of production if it expands output to 25 units​

Answer 1

Answer:

assuming 1000as fixed cost and 700as variable cost

Explanation:

if production goes up to 25 then avg cost will be

1000+(25*35) as 35 is variable cost per unit

total cost would be 1875

avg cost would be 1875/25 =75