Let's assume that a firm produces 40 products. Its total weekly cost (TC) at this output is $1200. This includes TVC and TFC. We

Question

3 years ago

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Let's assume that a firm produces 40 products. Its total weekly cost (TC) at this output is $1200. This includes TVC and TFC. We

also know that the firm employs 3 part-time workers at a wage cost of $200 per worker per week. This is the firm's only variable cost (TVC). What is the firm's average fixed cost (AFC) at this output

Business

1 answer:

ikadub [295] · Answer 1 · 2022-07-03T22:10:34+03:00

Answer:

$15

Explanation:

The computation of the average fixed cost is shown below:

As we know that

Average fixed cost is

= Total fixed cost ÷ Quantity

where,

Total fixed cost is

= Total cost - total variable cost

= $1,200 - $200 × 3

= $1,200 - $600

= $600

And the quantity is 40 products

So, the average fixed cost is

= $600 ÷ 40

= $15