The total costs with N workers is N0 1000 N1 2200 N2 3200 N3

The total costs with N workers is: N=0, $1000; N=1, $2200; N=2, $3200; N=3, $4000; N=4, $4600; N=5, $5000; N=6, $5200; N=7, $5600; N=8, $6200; N=9, $7000; N=10, $7000. If the firms hires 5 workers, the average variable costs equals what?

Here, the fixed cost = $1000 (Note:The fixed costs are those incurred before any units are produced)

If the firms hires 5 workers, the average variable costs = (TC - TFC)/5 = (5000 - 1000)/5 = $800