$$\begin{array} { c c c c c c c }
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 4,AFC is
A)$200.
B)$250.
C)$500.
D)$1,000.
E)cannot be determined.

Question

$$\begin{array} { c c c c c c c } 
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 4,AFC is
A)$200.
B)$250.
C)$500.
D)$1,000.
E)cannot be determined.

Quizplus · Accepted Answer

AFC (Average Fixed Cost) is calculated as Fixed Cost divided by the quantity of output. Given a fixed cost of $1000 and an output of 4, AFC = $1000 / 4 = $250.

Use the Above Table and Assume a Fixed Cost of