A firm's average total cost is $60, its average variable cost is $30, and its total fixed cost is $600. Its output is
A) 50 units.
B) 20 units.
C) 40 units.
D) 30 units.

Question

Quizplus · Accepted Answer

The firm's output can be determined by dividing the total fixed cost by the difference between average total cost and average variable cost. Here, $600 / ($60 - $30) = $600 / $30 = 20 units.

A Firm's Average Total Cost Is $60, Its Average Variable