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Calculate the average total cost (ATC) for a firm with a total cost of 9000 FCFA at an output of 20 kg.

Economics

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Answer

A. 450 FCFA\text{A. 450 FCFA}

Step-by-step solution

3 steps

  1. Identify the Total Cost (TC) at the output level of 20 kg from Figure 1.

    From the graph, when the output is 20 kg, the Total Cost (TC) is 9000 FCFA.

  2. Calculate the Average Total Cost (ATC) using the formula

    ATC=Total Cost (TC)Output (Q)ATC = \frac{\text{Total Cost (TC)}}{\text{Output (Q)}}

    Substitute the values:

    ATC=9000 FCFA20 kgATC = \frac{9000 \text{ FCFA}}{20 \text{ kg}}

  3. Perform the calculation.

    ATC=450 FCFA/kgATC = 450 \text{ FCFA/kg}

    The calculated average total cost is 450 FCFA.

    The final answer is A. 450 FCFA\text{A. 450 FCFA}.

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