What is the formula for calculating average fixed cost? If a firm has fixed costs of $8,500 per month and produces 1,900 units of output per month, what is its average fixed cost?
What will be an ideal response?
Average fixed cost is equal to total fixed cost divided by the number of units of output. Therefore, the firm's average fixed cost would be equal to $8,500/1,900 = $4.47.
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