In the Short Run, If Average Variable Costs Equal $45

question 34

Multiple Choice

In the short run, if average variable costs equal $45, average total costs equal $50, and output equals 100, the total fixed costs will equal

• A) $5.
• B) $500.
• C) $1,000.
• D) $5,000.

---

Definitions:

Competition-Based Method

A method of price setting based on the price offered by competitors.

Price-Setting Methods

Various strategies and techniques businesses use to determine the selling price of their goods or services.

Variable Cost Method

An accounting method where product costs include variable expenses, changing with the level of output, but exclude fixed costs.

Markup Per Unit

The sum added onto the purchase price of products to account for overhead costs and generate profit.