Can someone help me figure out this practice problem ive been stuck on:
Slider owns a hamburger restaurant. Slider’s minimum average variable cost is $10 at a quantity of 100 hamburgers, and his minimum average total cost is $15 at a quantity of 200 hamburgers. His total fixed cost is $300. Use this information to answer the questions below.
1. What is Slider’s Average Variable Cost when he sells 200 hamburgers?
1 Answer
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AFC = TFC/Q so If TFC is 300 then at q = 200 his AFC is 1.5
AVC = ATC – AFC
So AVC = 15 – 1.5 or 13.5
