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26 June, 03:20

A business produces 10 pairs of eyeglasses. it incurs $30 in average variable cost and $35 in average total cost. the total fixed cost of producing 10 pairs of eyeglasses is:

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  1. 26 June, 06:07
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    The average total costs, TC, of the production is equal to the sum of the average variable cost, VC, and the total fixed cost, FC. If we translate this to an equation we derive,

    TC = FC + VC

    To calculate for the value of FC, we simply have to transpose VC to the other side of the equation and we arrive with the equation,

    FC = TC - VC

    Then, we substitute the known values in the given.

    FC = ($35) - ($30)

    FC = $5

    Hence, the total fixed cost of the production is equal to $5.
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