Suppose that a firm is currently producing 500 units of output. At this level of output, AVC is $1 per unit, and TFC is $500. What is the firm's TC?
A) $1,500
B) $1,000
C) $500
D) $501

Question

Quizplus · Accepted Answer

To find the total cost (TC), we need to add the total variable cost (TVC) and total fixed cost (TFC). 
TVC = AVC x Q = $1 x 500 = $500
TC = TVC + TFC = $500 + $500 = $1,000. 
Therefore, the answer is B.

Suppose That a Firm Is Currently Producing 500 Units of Output