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A frim has variable cost of Rs 1000 at 5 units...

This question belongs to Commerce Economics
Economics
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A frim has variable cost of Rs.1000 at 5 units of output. If fixed costs are Rs.400, what will be the average total cost at 5 units of output?

Answer & Solution
Correct Answer: Option B
Total costs (TC) = FC + TVC. Average Fixed Costs (AFC) = FC/Q. TC = 400+1000 = 1400. AFC = 1400/5 = 280.
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