Answer: $30
Explanation:
Given that,
Average variable cost (AVC) = $25
Average fixed cost (AFC) = $5
Marginal cost (MC) = $30
Average total cost (ATC) = Average fixed cost (AFC) + Average variable cost (AVC)
= $5 + $25
= $30
Therefore, average total cost is the sum of average fixed cost and average variable cost. Alternatively, average total cost is calculated by dividing total cost to units of output produced.
Answer:
the degree of operating leverage is 5
Explanation:
The computation of the degree of operating leverage is given below:
= Contribution margin ÷ EBIT
= (Sales - Variable expense) ÷ (Sales - Variable expense - Fixed expense)
= ($670,000 - $420,000) ÷ ($670,000 - $420,000 - $200,000)
= $250,000 ÷ $50,000
= 5
Hence, the degree of operating leverage is 5
If there's upward pressure on price, there would be an increase in the quantity supplied.
<h3>What the relationship between price and the quantity supplied?</h3>
There is a positive relationship between price and the quantity supplied. When there is an increase in price, the quantity supplied increases all things being equal.
The positive relationship between price and the quantity supplied is a result of the desires to earn more profit. So when price increases, in order to earn higher income, producers would increase the quantity supplied. This postulation is in line with the law of supply.
To learn more about the law of supply, please check: brainly.com/question/26374465
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