$$\begin{array} { c c c c c c c }
& \text { Variable } & \text { Total } & & & & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { AFC } & \text { AVC } & \text { ATC } & \text { Cost } \
1 & 400 & & & & & \
2 & 700 & & & & & \
3 & 1,000 & & & & & \
4 & 1,400 & & & & &
\end{array}$$ Use the above table and assume a fixed cost of $1000.
-At an output of 3,AVC is
A)$250.
B)$300.
C)$333.
D)$400.
E)$667.

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 3,AVC is
A)$250.
B)$300.
C)$333.
D)$400.
E)$667.

Quizplus · Accepted Answer

To find the Average Variable Cost (AVC) at an output of 3, first calculate the Total Variable Cost (TVC) by subtracting the fixed cost from the total cost at that output level. The fixed cost is given as $1000. At an output of 3, the total cost is not directly given, but the variable cost is $1000. Since the fixed cost is also $1000, the total cost at an output of 3 is $2000. Subtracting the fixed cost from this gives a TVC of $1000. The AVC is then the TVC divided by the quantity of output, which is $1000 / 3 = $333.33, rounded to $333.

Use the Above Table and Assume a Fixed Cost of