You Operate a Factory That Produces Beach Towels

question 87

Multiple Choice

You operate a factory that produces beach towels. Your current level of output equals 2000 towels per week. Your weekly variable cost equals $8000. If your total cost each week equals $9000, what can you conclude about the fixed costs of production?

• A) that the total cost equals $17 000
• B) that the total fixed cost equals $8 per towel
• C) that the average fixed cost equals 50 cents per towel
• D) that the average fixed cost equals $1000

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