The table given below shows the total cost of producing different units of the output by a competitive firm.Table 8.4

-Refer to Table 8.4. At 4 units of output,
A)AFC is $6.25 and AVC is $10.
B)AFC is $6.25 and AVC is $40.
C)AFC is $40 and AVC is $6.25.
D)AFC is $25 and AVC is $40.
E)AFC and AVC cannot be determined for the firm in question.

Question

The table given below shows the total cost of producing different units of the output by a competitive firm.Table 8.4
 
-Refer to Table 8.4. At 4 units of output,
A)AFC is $6.25 and AVC is $10. 
B)AFC is $6.25 and AVC is $40. 
C)AFC is $40 and AVC is $6.25. 
D)AFC is $25 and AVC is $40. 
E)AFC and AVC cannot be determined for the firm in question.

Quizplus · Accepted Answer

AFC (Average Fixed Cost) is calculated as total fixed cost divided by the quantity of output. If the total fixed cost is $25 (assuming from context, as the table is not provided) and the output is 4 units, then AFC = $25 / 4 = $6.25. AVC (Average Variable Cost) is calculated as total variable cost divided by the quantity of output. If the total variable cost for 4 units is $40 (again, assuming from context), then AVC = $40 / 4 = $10.

The Table Given Below Shows the Total Cost of Producing