Suppose a company has $400 of fixed costs and a constant marginal cost of 10 cents. What are average total costs (ATC) at: Instructions:
Round your responses to two decimal places.
a. Output of 10 units?
b. Output of 100 units?
c. Output of 1,000 units?
a) | variable cost | 10*.10= | 1 | |||
fixed cost | 400 | |||||
total cost | 401 | |||||
average cost per unit | 401/10 | |||||
40.1 | answer | |||||
b) | variable cost | 100*.10= | 10 | |||
fixed cost | 400 | |||||
total cost | 410 | |||||
average cost per unit | 410/100 | |||||
4.1 | answer | |||||
c) | variable cost | 1000*.10= | 100 | |||
fixed cost | 400 | |||||
total cost | 500 | |||||
average cost per unit | 500/1000 | |||||
0.5 | answer | |||||
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