If the total cost of producing one unit of the output is $100 and the marginal cost of that unit is $20, the average fixed cost of producing two units of output is ________
Fill in the blank(s) with correct word
$40
Marginal cost = Variable cost ; As we are producing only 1 unit variable cost will be $20
Total Fixed Cost = Total Cost - Total Variable Cost
$100 - $20 = $80
Average Fixed Cost = 80/2 = $40
You might also like to view...
The price of gasoline in Europe is about three times that in the United States, mainly because the European gas tax is higher than the U.S. gas tax
How would an increase in the gas tax in the United States to the European level change carbon emissions? Would this tax increase bring greater efficiency or would it increase deadweight loss?
If the marginal cost of producing vanity license plates is virtually zero (by prison inmates with little else to do), then states would maximize their profits on plate sales at the point on a linear demand curve where
A. demand is inelastic. B. demand is elastic. C. demand is unit elastic. D. the demand curve crosses the horizontal axis.
Long-run economic growth is the process by which productivity increases
A) the employment rate. B) the average standard of living. C) the size of the labor force. D) federal tax revenues.
Which is always TRUE at a firm's profit-maximizing rate of production?
A) Total Revenue = Total Costs B) The total revenue curve lies below the total cost curve. C) Marginal Revenue > Marginal Cost D) Marginal Revenue = Marginal Cost