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?

The correct answer is A. 380.

Average total cost (ATC) is calculated by dividing total cost (TC) by the number of units produced (Q). In this case, we are given that variable cost (VC) is Rs.1000 at 5 units of output, and fixed costs (FC) are Rs.400. Therefore, total cost is:

TC = VC + FC = 1000 + 400 = 1400

Average total cost is then:

ATC = TC / Q = 1400 / 5 = 280

Option B is incorrect because it is the average variable cost, which is calculated by dividing variable cost by the number of units produced. In this case, the average variable cost is:

AVC = VC / Q = 1000 / 5 = 200

Option C is incorrect because it is the marginal cost, which is the change in total cost divided by the change in the number of units produced. In this case, the marginal cost is:

MC = ΔTC / ΔQ = 0

Option D is incorrect because it is the fixed cost, which is the cost that does not change with the number of units produced. In this case, the fixed cost is:

FC = 400