Question

When a company produces​ 5,000 units, total costs equal​ $150,000 and total variable costs equal​ $75,000. At this level of​ output, what is that company average fixed​ cost?

Answer 1

$15

Step-by-step explanation:

Average fixed cost = Total fixed cost / quantity

Total fixed cost = Total cost - Total variable cost

= $150,000 - $75,000 = $75,000

Average fixed cost = $75,000 /5000 = $15

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