Use the following to answer questions:
Figure: Short-Run Costs
-(Figure: Short-Run Costs) Look at the figure Short-Run Costs. At 7 units of output, average fixed cost is approximately _____, and average variable cost is approximately _____.
A) $100; $100
B) $10; $135
C) $40; $100
D) $140; $140

Question

Use the following to answer questions:
Figure: Short-Run Costs 
-(Figure: Short-Run Costs) Look at the figure Short-Run Costs. At 7 units of output, average fixed cost is approximately _____, and average variable cost is approximately _____.
A) $100; $100 
B) $10; $135 
C) $40; $100 
D) $140; $140

Quizplus · Accepted Answer

At 7 units of output, the total fixed cost is $280, so the average fixed cost (AFC) is $280/7 = $40. The total variable cost is $700, so the average variable cost (AVC) is $700/7 = $100.

Use the Following to Answer Questions