Question

At an output level of 50 units per day, a firm has average total costs of $60 and average variable costs of $35. Its total fixed costs are____________.

Answer 1

$ 1250

Explanation:

output = 50 units per day

average total cost = $ 60

total cost = output × average total cost =50 × 60 = $ 3000

total variable cost = output × average variable cost = 35 × 50 = $ 1750

total cost = total fixed cost + total variable cost

total fixed cost = total cost - total variable cost = $ 3000 - $ 1750 = $ 1250