Question

Slider owns a hamburger restaurant. Slider's minimum average variable cost is $10 at a quantity of 100 hamburgers, and his minimum average total cost is $15 at a quantity of 200 hamburgers. His total fixed cost is $300 . Use this information to answer the questions.What is Slider's AVC when he sells 200 hamburgers

Answer 1

Answer:

As, per To the Given Information:

Minimum AVC = $10, When Quantity = 100 Hamburgers  

Minimum (AC) = $15, When Quantity = 200 Hamburgers

Fixed Cost = $300

To find out the Average variable cost when the quantity of 200 hamburgers sold, we have to compute the Total Cost;

Total Cost = Average Cost × Quantity

Total Cost =15 x 200

Total Cost = 3,000

Now, Variable Cost (VC)  

Variable Cost = Total Cost - Fixed Cost

Variable Cost = 3,000 - 300

Variable Cost = 2,700

Thus,  

AVC when Quantity sold = 200 hamburgers

Average Variable Cost = Variable Cost / Quantity

Average Variable Cost = 2,700 / 200

Average Variable Cost =13.5

Therefore, the Average Variable Cost after selling 200 hamburgers is $13.5

Answer 2

Answer:

$5

Explanation:

Average Variable Cost = $10

Quantity of hamburger = 100

Total variable cost = AVC X Quantity

Total variable cost for hamburger = $10 X 100 = $1000

Average Total cost =$15

Quantity of 200

Total cost = $3000

Fixed cost = $3000

Therefore, Sliders AVC when he sell 200 hamburger will be

TVC=AVC X Quantity

AVC= TVC/Quantity

AVC=$1000 / 200 hamburger

AVC = $5/hamburger.