**Question 5**Suppose that, when producing 35 units of output, a firm's Average Variable Cost (AVC) is $20, its Average Fixed Cost (AFC) is $6, and its Marginal Cost (MC) is $28. This firm's:**Multiple Choice Options:**- ( ) ATC is $34.- ( ) ATC is $54.- ( ) Total cost is $910.- ( ) Total cost is $28.**Explanation:**To solve this, we calculate the Average Total Cost (ATC) using the formula:\[ \text{ATC} = \text{AVC} + \text{AFC} \]Given:- AVC = $20- AFC = $6\[ \text{ATC} = 20 + 6 = 26 \]The firm’s question is whether the ATC is $34 or $54, which based on the information provided, neither option for ATC is correct. However, for calculating total cost:Total Cost = ATC x Quantity\[ \text{Total Cost} = 26 \times 35 = 910 \]Thus, the correct answer related to the total cost is $910.

Variable cost is the part of total cost that changes with change in output. AVC = VC/Q Fixed cost is…

Answered: Suppose that, when producing 35 units…

ENGR.ECONOMIC ANALYSIS

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Suppose that, when producing 35 units of output, a firm's AVC is $20, its AFC is $6, and its MC is $28. This firm's Multiple Choice ATC is $34. ATC is $54. total cost is $910. total cost is $28.