fast please 36. ### Cost Structure AnalysisThe figure on the right illustrates the cost structure for a firm. It depicts various cost curves a company might encounter.#### Question:When the output level is 100 units, the average fixed cost is:- A. $10.- B. $8.- C. $5.- D. This cannot be determined from the diagram.#### Diagram Explanation:- **Axes**: - The vertical axis represents cost in dollars per unit. - The horizontal axis represents the quantity of output in units.- **Cost Curves**: - **MC (Marginal Cost)**: This curve shows the additional cost of producing one more unit of output. - **ATC (Average Total Cost)**: This curve indicates the average cost per unit, including both fixed and variable costs. - **AVC (Average Variable Cost)**: This curve represents the average variable cost per unit, excluding fixed costs.- **Important Points**: - At an output level of 100 units, specific values for costs are denoted: - The ATC is slightly above $20. - The AVC is at $12.To find the average fixed cost (AFC) at this output level, we consider: \[ \text{AFC} = \text{ATC} - \text{AVC} \]At an output of 100 units:\[ \text{ATC} \approx \$20 \] \[ \text{AVC} = \$12 \] \[ \text{AFC} = \$20 - \$12 = \$8 \] Thus, the correct answer is **B. $8**.

The fixed cost refers to a cost that does not change with a change in the level of output. The fixed…

Answered: The figure to the right shows the cost…

The figure to the right shows the cost structure for a firm When the output level is 100 units average fixed cost is O A. $10. OB. $8. OC. $5. OD. This cannot be determined from the diagram.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

fast please 36.

### Cost Structure Analysis

The figure on the right illustrates the cost structure for a firm. It depicts various cost curves a company might encounter.

#### Question:
When the output level is 100 units, the average fixed cost is:

- A. $10.
- B. $8.
- C. $5.
- D. This cannot be determined from the diagram.

#### Diagram Explanation:

- **Axes**:
- The vertical axis represents cost in dollars per unit.
- The horizontal axis represents the quantity of output in units.

- **Cost Curves**:
- **MC (Marginal Cost)**: This curve shows the additional cost of producing one more unit of output.
- **ATC (Average Total Cost)**: This curve indicates the average cost per unit, including both fixed and variable costs.
- **AVC (Average Variable Cost)**: This curve represents the average variable cost per unit, excluding fixed costs.

- **Important Points**:
- At an output level of 100 units, specific values for costs are denoted:
- The ATC is slightly above $20.
- The AVC is at $12.

To find the average fixed cost (AFC) at this output level, we consider:
\[ \text{AFC} = \text{ATC} - \text{AVC} \]

At an output of 100 units:
\[ \text{ATC} \approx \$20 \]
\[ \text{AVC} = \$12 \]
\[ \text{AFC} = \$20 - \$12 = \$8 \]

Thus, the correct answer is **B. $8**.

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