Answer to Question #67744 in Economics of Enterprise for Antonette Nkalanga

Question

Suppose a firm produces 20 units of output per month and has a total variable cost of R3 000 per month. If
its average fixed costs are R400 per month, what are its total costs per month?

Answer 1

Total cost per month t is equal to sum of fixed and variable costs
Variable costs per month are R3000
Fixed costs per month are R400 (its not per unit, its per month!)
So total costs are 3000+400=R3400