Question

If total fixed cost of producing 5 units of output is Rs. 20 and total variable cost is Rs. 50, then what
will be the value of Total cost of producing 5 units of output?
(a) Rs. 30 (b) Rs. 70 (c) Rs. 1000 (d) Rs. 50

Answer 1

Explanation:

Here, the fixed cost of 5 units of output is $20 and we know that the average fixed cost is the ratio of the fixed cost and units of output product. That is, AFC = $20/5 which is $4.