A firm is producing 100 units of output at a total cost of $400. The firm's average variable cost is $3 per unit. What is the firm's total fixed cost?
A) $1
B) $50
C) $100
D) $300

Question

Quizplus · Accepted Answer

The total cost is $400, and the average variable cost is $3 per unit for 100 units, so total variable cost is $300. Total fixed cost is total cost minus total variable cost, which is $400 - $300 = $100.

A Firm Is Producing 100 Units of Output at a Total