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When it produces 100 units, a firm’s total variable cost is $300 and its total fixed cost is $2700. What is the average cost?1 point$3$24$27$30

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Solution

The average cost of a product is calculated by dividing the total cost (fixed costs + variable costs) by the quantity of output produced.

Step 1: Calculate the total cost. The total cost is the sum of the total variable cost and the total fixed cost. In this case, the total cost is 300(totalvariablecost)+300 (total variable cost) + 2700 (total fixed cost) = $3000.

Step 2: Calculate the average cost. The average cost is the total cost divided by the quantity of output produced. In this case, the average cost is 3000(totalcost)/100units(quantityofoutputproduced)=3000 (total cost) / 100 units (quantity of output produced) = 30.

So, the average cost is $30.

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