The accompanying table gives cost data for a firm that is selling in a purely competitive market. At 6 units of output, total fixed cost is ____ and total cost is ____. Multiple Choice $50; $300 $100; $200 $150; $300 $25; $50

Respuesta :

The total fixed cost is $150 and the total cost is $300.

What is total fixed cost?

Total fixed cost means the fixed per unit multiplied by the number of units at that level of production, from the table average fixed cost, in other words, fixed cost per unit is $25, in essence, total fixed cost is computed thus:

total fixed cost=average fixed cost*units

average fixed cost=$25

units=6

total fixed cost=$25*6

total fixed cost=$150

The fact the fixed cost is $150 means that the option which has total fixed cost $150 and total cost as $300 is the most appropriate , however, we would determine below how $300 of total cost was derived.

What is total cost?

Total cost is the sum of the total fixed cost plus the total variable cost

Total cost=total fixed cost+ total variable cost

total variable cost=average variable cost*units

average variable cost( from the cost data)=$25

total variable cost=$25*6

total variable cost=$150

total cost=$150+$150

total cost=$300

In essence, the correct option is the third one, where total fixed cost is $150 and the total cost is $300

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