The table given below shows the average total cost of production of a firm at different levels of the output. Table 7.5

-In Table 7.5,if the total fixed cost is $3,what is the total variable cost of producing 5 units?
A)$38
B)$32
C)$3
D)$8
E)Cannot be determined from the information given.

Question

The table given below shows the average total cost of production of a firm at different levels of the output. Table 7.5
 
-In Table 7.5,if the total fixed cost is $3,what is the total variable cost of producing 5 units?
A)$38 
B)$32 
C)$3 
D)$8 
E)Cannot be determined from the information given.

Quizplus · Accepted Answer

Total cost= Total fixed cost + Total variable cost
Given, Total fixed cost = $3
To find total variable cost for producing 5 units, we can look at the table and see that at 5 units, the average total cost is $7.60 per unit. 
So, 
Total cost for producing 5 units = $7.6 x 5 = $38
Total fixed cost for producing 5 units = $3
Therefore, Total variable cost for producing 5 units = Total cost - Total fixed cost = $38 - $3 = $35 
Hence, the total variable cost of producing 5 units is $35, which is option B.

The Table Given Below Shows the Average Total Cost of Production