Alejandro is one of the leading widget producers in the country. At his current level of production, his total costs amount to $

Question

4 years ago

11

Alejandro is one of the leading widget producers in the country. At his current level of production, his total costs amount to $

5,000, total fixed costs are $2,000, and average total costs are $250.
How many widgets is Alejandro producing?

a. 10

b. 15

c. 20

d. 25

e. There is not enough information to answer the question.

Business

1 answer:

My name is Ann [436] · Answer 1 · 2022-01-17T19:13:17+03:00

Answer:

<h2>Based on the information given in the question,Alejandro's company is producing 20 widgets total.Hence,the answer is option c. or 20.</h2>

Explanation:

In Microeconomics,the average total cost of production is calculated by dividing the total cost of production by the number or quantity of output produced by any firm or company.In other words,Total cost of production divided by the average cost of production is the total number or quantity of output produced by any firm or company.
Here,the average total cost of production is given as $250 and the total cost of production is $5000.
Therefore,based on the formula to estimate average total cost of production,total number of widgets produced by Alejandro's firm= $\frac{5000}{250}=20 widgets$ .Thus,the total number of widgets produced by Alejandro's company is 20.