Question

Refer to the following table. What is the average variable cost of producing three units of the good?

Output	Total Fixed Cost	Total Variable Cost	Total Cost		Average Fixed Cost	Average Variable Cost		Average Total Cost	Marginal Cost
1	—	—	—	—			—	—	—
2	—	—	$740	—			—	—	—
3	—	—	$860	—			???	—	$120
4	—	$360	—	—			—	—	—
5	$500	—	—	—			—	—	—

Group of answer choices

$20

$140

$80

$120

Answer 1

Answer - option (d) $120.