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31 July, 10:08

Slider owns a hamburger restaurant. Slider's minimum average variable cost is $10 at a quantity of 100 hamburgers, and his minimum average total cost is $15 at a quantity of 200 hamburgers. His total fixed cost is $300. Use this information to answer the questions. What is Slider's AVC when he sells 200 hamburgers

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  1. 31 July, 10:38
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    As, per To the Given Information:

    Minimum AVC = $10, When Quantity = 100 Hamburgers

    Minimum (AC) = $15, When Quantity = 200 Hamburgers

    Fixed Cost = $300

    To find out the Average variable cost when the quantity of 200 hamburgers sold, we have to compute the Total Cost;

    Total Cost = Average Cost * Quantity

    Total Cost = 15 x 200

    Total Cost = 3,000

    Now, Variable Cost (VC)

    Variable Cost = Total Cost - Fixed Cost

    Variable Cost = 3,000 - 300

    Variable Cost = 2,700

    Thus,

    AVC when Quantity sold = 200 hamburgers

    Average Variable Cost = Variable Cost / Quantity

    Average Variable Cost = 2,700 / 200

    Average Variable Cost = 13.5

    Therefore, the Average Variable Cost after selling 200 hamburgers is $13.5
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