Use the table below to answer the following question.
Units of
Total Fixed
Total Variable
Output
Cost (dollars)
Cost (dollars)
1
1,000
1,200
2
1,000
2,400
3
1,000
3,600
4
1,000
5,000
5
1,000
6,600
What is the average total cost at an output level of four units?
A. $1,200.
B. $1,400.
C. $1,500.
D. $2,000.
Answer: C
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