Question

If the TC (Total Cost) at 10 units of output is 55 and the Fixed Cost is 5, then the AVC (Average Variable Cost) at 10 units of output will be:

• A. 2.5
• B. 6
• C. 5
• D. 11

Hint:

AVC = (TC - FC) / Q; TC = FC + VC.

Answer 1

The Correct Option is C

Step 1: Variable Cost \( = TC - FC = 55 - 5 = 50 \).
Step 2: Test each option by multiplying it with Q = 10; only \( 5 \times 10 = 50 \) matches the variable cost found above.
Step 3: So AVC must be 5, matching option 3.
Correct option: \[ \boxed{AVC = 5} \]