Ernie's Earmuffs Produces 200 Earmuffs Per Year at a Total

question 93

Multiple Choice

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?

• A) $12
• B) $10
• C) $8
• D) $2

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Definitions:

Complements

Goods or services that are used together, where an increase in demand for one leads to an increase in demand for the other.

Quantity Supplied

The total number of goods or services that manufacturers are ready and can provide on the market at a particular price level.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specific period.

Supply Curve

A visual depiction showing the link between a product or service's price and the amount of it a supplier is prepared and capable of offering for sale.