Cindy's car wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes
1 answer:
The correct option is b. the firm's total cost $500.
Total cost:
Total fixed costs are the total of all recurring, fixed costs that a business incurs.
The variable and fixed expenses of providing commodities are combined to create a total using the total cost formula. The equation is:
Total cost = (Average fixed cost x average variable cost) × Number of units produced.
Cindy's Car Wash has average variable costs of $ and average fixed costs of
when it produces
units of output (car washes).
The firm's total cost is
AFC = $, AVC = $
Average total cost = AFC + AVC = $
It produces units
$ ×
= $
Therefore, option b is the answer $.
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