A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its total cost is
A) less than $85,000.
B) between $85,000 and $95,000.
C) between $95,000 and $105,000.
D) more than $105,000.

Question

Quizplus · Accepted Answer

The total cost is calculated as Total Fixed Cost + (Average Variable Cost * Output). Here, it is $10,000 + ($90 * 1,000) = $100,000, which falls between $95,000 and $105,000.

A Firm's Average Variable Cost Is $90, Its Total Fixed