Use the table below to answer the following question.

What is the average total cost at an output level of four units?
A) $1,200.
B) $1,400.
C) $1,500.
D) $2,000.

Question

Use the table below to answer the following question.

What is the average total cost at an output level of four units?
A) $1,200. 
B) $1,400. 
C) $1,500. 
D) $2,000.

Quizplus · Accepted Answer

To find the average total cost at an output of four units, we need to look at the row where quantity is 4. We see that at this level of output, total cost is $6,000 and total variable cost is $4,000. Therefore, total fixed cost is $2,000. To find average total cost, we divide total cost by quantity: $6,000/4 = $1,500. Thus, the answer is choice letter C.

Use the Table Below to Answer the Following Question