{"id":45013,"date":"2024-04-15T21:51:59","date_gmt":"2024-04-15T21:51:59","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=45013"},"modified":"2024-04-15T21:51:59","modified_gmt":"2024-04-15T21:51:59","slug":"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","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/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\/","title":{"rendered":"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?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;380&#8243; option2=&#8221;280&#8243; option3=&#8221;60&#8243; option4=&#8221;400&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. 380.<\/p>\n<p>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:<\/p>\n<p>TC = VC + FC = 1000 + 400 = 1400<\/p>\n<p>Average total cost is then:<\/p>\n<p>ATC = TC \/ Q = 1400 \/ 5 = 280<\/p>\n<p>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:<\/p>\n<p>AVC = VC \/ Q = 1000 \/ 5 = 200<\/p>\n<p>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:<\/p>\n<p>MC = \u00ce\u0094TC \/ \u00ce\u0094Q = 0<\/p>\n<p>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:<\/p>\n<p>FC = 400<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;380&#8243; option2=&#8221;280&#8243; option3=&#8221;60&#8243; option4=&#8221;400&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-45013","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A frim has variable cost of Rs.1000 at 5 units of output. 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