Table 7-5
-Table 7-5 shows short-run total cost figures for a stereo manufacturer.The manufacturer's short-run fixed cost is
A)0.
B)$75.
C)$200.
D)$400.

Question

Table 7-5 
-Table 7-5 shows short-run total cost figures for a stereo manufacturer.The manufacturer's short-run fixed cost is
A)0. 
B)$75. 
C)$200. 
D)$400.

Quizplus · Accepted Answer

The short-run fixed cost is equal to the vertical distance between the total cost curve and the total variable cost curve at the level of output where production takes place. In this case, the level of output where production takes place is 4 units, and the vertical distance between the TC and TVC curves at that level of output is equal to $200. Therefore, the manufacturer's short-run fixed cost is $200.

Table 7-5 -Table 7-5 Shows Short-Run Total Cost Figures for a Stereo