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    • Question

      With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. Its output is:

      A 200 units Correct Answer Incorrect Answer
      B 400 units Correct Answer Incorrect Answer
      C 800 units Correct Answer Incorrect Answer
      D 1,600 units. Correct Answer Incorrect Answer
      E 1,300 units Correct Answer Incorrect Answer

      Solution

      ATC = AFC + AVC. AFC = TFC/Q. Put the values to get output.

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