{"id":57801,"date":"2024-04-16T01:08:18","date_gmt":"2024-04-16T01:08:18","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=57801"},"modified":"2024-04-16T01:08:18","modified_gmt":"2024-04-16T01:08:18","slug":"with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/","title":{"rendered":"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is"},"content":{"rendered":"

[amp_mcq option1=”200 units” option2=”400 units” option3=”800 units” option4=”1,600 units” correct=”option2″]<\/p>\n

The correct answer is B. 400 units.<\/p>\n

Average total cost (ATC) is total cost (TC) divided by output (Q). In this case, ATC = 3 = TC\/Q. We know that fixed costs (FC) are 400, so variable costs (VC) are TC – FC = 3Q – 400. We also know that AVC = VC\/Q = 2.50. Substituting this into the equation for TC, we get 3Q – 400 = 2.50Q. Solving for Q, we get Q = 400 units.<\/p>\n

Option A is incorrect because it is the average variable cost, not the average total cost. Option C is incorrect because it is twice the average total cost, which would mean that the firm is not covering its fixed costs. Option D is incorrect because it is four times the average total cost, which would mean that the firm is making a very large profit.<\/p>\n","protected":false},"excerpt":{"rendered":"

[amp_mcq option1=”200 units” option2=”400 units” option3=”800 units” option4=”1,600 units” correct=”option2″]<\/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-57801","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\nWith fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=”200 units” option2=”400 units” option3=”800 units” option4=”1,600 units” correct=”option2″]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-16T01:08:18+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/","og_locale":"en_US","og_type":"article","og_title":"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is","og_description":"[amp_mcq option1=”200 units” option2=”400 units” option3=”800 units” option4=”1,600 units” correct=”option2″]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-16T01:08:18+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/","url":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/","name":"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-16T01:08:18+00:00","dateModified":"2024-04-16T01:08:18+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-fixed-costs-of-rs-400-a-firm-has-average-total-costs-of-rs-3-and-average-variable-costs-of-rs-2-50-its-output-is\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"Economics","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/economics\/"},{"@type":"ListItem","position":4,"name":"With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/57801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=57801"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/57801\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=57801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=57801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=57801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}