At the end of the year, a firm produced 20 comma 000
laptop computers. Its total costs were $8
million, and its fixed costs were $5
million.
Part 2
What are the average variable costs of this firm?
To find the average variable costs of the firm, we need to subtract the fixed costs from the total costs and then divide by the number of laptop computers produced.
Total variable costs = Total costs - Fixed costs = $8 million - $5 million = $3 million
Average variable costs = Total variable costs / Number of laptop computers produced = $3 million / 20,000 = $150 per laptop computer.
To find the average variable costs of the firm, we need to subtract the fixed costs from the total costs and then divide by the number of laptop computers produced.
Average variable costs = (Total costs - Fixed costs) / Number of laptop computers produced
Given:
Total costs = $8 million
Fixed costs = $5 million
Number of laptop computers produced = 20,000
Average variable costs = ($8 million - $5 million) / 20,000
Average variable costs = $3 million / 20,000
Average variable costs = $150 per laptop computer
Therefore, the average variable costs of this firm are $150 per laptop computer.
To find the average variable costs of the firm, we need to first determine the total variable costs and then divide it by the number of laptop computers produced.
Total variable costs can be calculated by subtracting the fixed costs from the total costs:
Total variable costs = Total costs - Fixed costs
In this case, the total costs of the firm are given as $8 million, and the fixed costs are $5 million. Therefore, the total variable costs can be calculated as follows:
Total variable costs = $8 million - $5 million
Total variable costs = $3 million
Next, we need to divide the total variable costs by the number of laptop computers produced. It is given that the firm produced 20,000 laptop computers.
Average variable costs = Total variable costs / Number of laptop computers produced
Average variable costs = $3 million / 20,000
Average variable costs = $150
Therefore, the average variable costs of this firm are $150 per laptop computer.