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sweet-ann [11.9K]
3 years ago
8

In the short run, if average variable cost equals $50, average total cost equals $75, and output equals 100, the total fixed cos

t must be
Business
1 answer:
musickatia [10]3 years ago
5 0

Answer: $2500

Explanation:

From the question,

Average variable cost(AVC) = $50

Average total cost (ATC) = $75

Output (Q) = 100

Since Average fixed cost is the difference between the average total cost and the average Variable cost. This will be:

AFC = ATC - AVC

AFC = $75 - $50

AFC = $25

We should note that:

AFC = TFC / Q

TFC = AFC × Q

TFC = $25 × 100

TFC = $2500

Therefore, total fixed cost is $2500

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