This Question 1 pt 13 of 45 6 complete Using the table of sh

This Question: 1 pt 13 of 45 (6 complete) Using the table of short-run data of a perfectiy competitive firm that produces auto parts, what is the fixed cost of production? (Output can only be increased in batches of 100 units) Variable Cost Total Cost Dollars) $1,000 1.360 1,560 1,960 2.760 4,000 5 800 ollars) so 360 560 960 1.760 3,000 4.800 Quantity O A. $1,000 100 200 300 400 500 600 ?. $500 D. It cannot be determined

Solution

Ans: $1000

Explanation:

Fixed costs are the costs incurred irrespective of level of output. From the table it is seen that the firm\'s total cost is $1000 even if output is zero.

TC = TFC + TVC

1000 = TFC + 0

SO, TFC = 1000