If average total cost is $50 and average fixed cost is $15 when output is 20 units, then the firm's total variable cost at that level of output is
A)$1,000.
B)$700.
C)$300.
D)impossible to determine without additional information.

Question

Quizplus · Accepted Answer

Average variable cost is calculated by subtracting average fixed cost from average total cost. So, AVC = $50 - $15 = $35. Total variable cost is AVC multiplied by output: $35 * 20 = $700.

If Average Total Cost Is $50 and Average Fixed Cost