Question

If variable costs for a firm are $800, the average total costs are $6, and the firm sells 175 units, what are the firm's fixed costs

Answer 1

Fixed costs= $250

Step-by-step explanation:

Giving the following information:

Total variable costs= $800

Average total costs= $6

The firm sells 175 units.

First, we need to calculate the total cost:

Total cost= 175*6= $1,050

Now, the fixed costs:

Fixed costs= total cost - total variable cost

Fixed costs= 1,050 - 800

Fixed costs= $250