At its current short-run level of production, a firm's average variable costs equal $15 per unit, and its average fixed costs equal $10 per unit. Its total costs at this production level equal $500. What is the firm's current output level? nothing units.

Question

Business

Sharp

26 September, 23:25

At its current short-run level of production, a firm's average variable costs equal $15 per unit, and its average fixed costs equal $10 per unit. Its total costs at this production level equal $500. What is the firm's current output level? nothing units.

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Answers (1)

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Budda · Answer 1

20 units

Explanation:

Let;

TC = Total cost = $500

AVC = Average variable cost = $15

AFC = Average fixed cost = $10

Q = Quantity = ?

(AVC + AFC) Q = TC

Substituting the values and solve for Q, we have:

($15 + $10) Q = $500

$25Q = $500

Q = $500/$25

Q = 20 units

Therefore, the firm's current output level is 20 units.