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6 November, 17:45

If the average total cost is $ 50 and the average fixed cost is $15 when output is 20 units then the firm's total variable cost at the level of output is

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Answers (2)
  1. 6 November, 18:09
    0
    Total Variable Cost at the level of output is $700.

    Explanation:

    TC = TFC + TVC

    $50 (20) = $15 (20) + TVC

    TVC = $1000 - $300

    TVC = $700
  2. 6 November, 21:41
    0
    Total variable cost = $700

    Explanation:

    We know,

    Total cost = Total fixed cost + Total variable cost

    Given,

    Average total Cost = $50,

    Output = 20 units

    Total Cost = Average total cost x output

    Total Cost = $50 x 20 units

    Total Cost = $1,000

    Average fixed cost = $15

    Total fixed cost = $15 x 20 units

    Total fixed cost = $300

    Putting the value in the formula, we can get,

    Total cost = Total fixed cost + Total variable cost

    or, $1,000 = $300 + Total variable cost

    or, Total variable cost = $1,000 - $300

    Hence, Total variable cost = $700
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