$$\begin{array} { c c c c c c c }
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 0,total cost is
A)0.
B)$400.
C)$1,000.
D)$1,400.
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 0,total cost is
A)0.
B)$400.
C)$1,000.
D)$1,400.
E)cannot be determined.

Quizplus · Accepted Answer

Fixed costs are costs that do not change with the level of output. Therefore, even at an output of 0, the total cost equals the fixed cost, which is $1,000.

Use the Above Table and Assume a Fixed Cost of