A firm has fixed cost of Rs. 100 and variable cost of Rs. 300 when it produces 20 units. What is its average total cost?
Correct answer: C. Rs. 20 per unit
- A. Rs. 5 per unit
- B. Rs. 15 per unit
- C. Rs. 20 per unit
- D. Rs. 25 per unit
Explanation
Total cost is Rs. 400, found by adding fixed cost and variable cost. Dividing Rs. 400 by 20 units gives an average total cost of Rs. 20 per unit.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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