A firm producing good A finds that it has a fixed cost of £10,000. It calculates that its variable costs when producing 200 units of good A are £8 per unit. What is the average total cost (ATC) at an output of 200 units?
Select ONE answer:
- £60
- £8
- £50
- £52
- £58
Justify your answer?
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This is multiple choice question is suitable for Economics KS5 classes.
The answer is 5 – fixed costs of £10,000 divided by 200 units =£50 per unit. The variable cost for 200 units is £8 per unit. Average total cost is, therefore, £50 + £8 = £58
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