-In Table 5.2, the average fixed cost of the first unit of output is ____, while the average fixed cost of producing 8 units of output is ____.
A) $30; $40
B) $40; $5
C) $40; $40
D) $40; $280
E) $40; $320

Question

-In Table 5.2, the average fixed cost of the first unit of output is ____, while the average fixed cost of producing 8 units of output is ____.
A) $30; $40 
B) $40; $5 
C) $40; $40 
D) $40; $280 
E) $40; $320

Quizplus · Accepted Answer

The average fixed cost (AFC) is calculated by dividing the total fixed cost by the number of units produced. For the first unit, if the AFC is $40, it means the total fixed cost is $40 (since $40/1 = $40). For 8 units, if the AFC is $5, it implies that the total fixed cost remains $40 (since $40/8 = $5), indicating that fixed costs do not change with the level of output.