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Calculate the average total cost (ATC) when the output (Q) is 20 kg, given that the total cost (TC) at this output level is 9000 FCFA.

Economics

ScanSolve AI Answer

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}

    Comparing this with the given options:
    A. 450 FCFA.
    B. 9,000 FCFA.
    C. 6,000 FCFA.
    D. 150 FCFA.

    The calculated average total cost matches option A.

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

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