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Economics · May / June 2020 · Paper 11 · Question 12

2281Firms’ costs, revenue and objectives

The table shows total fixed and total variable costs at different levels of output for a firm. At which level of output is average total cost lowest?

  1. Aoutput 100; total fixed cost 1200; total variable cost 1200
  2. Boutput 200; total fixed cost 1200; total variable cost 2000
  3. Coutput 300; total fixed cost 1200; total variable cost 2700
  4. Doutput 400; total fixed cost 1200; total variable cost 3600

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Correct answer: D. output 400; total fixed cost 1200; total variable cost 3600

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