passwella.
Menu

JAMB Economics 1992 Question 14

Question 14

Theory of Costs and Revenue

Quantity of singlets: short-run total costs (N)
0: 1,000
10: 1,200
20: 1,400
30: 1,600
40: 1,800
The short-run total costs for different levels of output for a firm producing singlets are shown above. Calculate the variable cost per unit at an output of 20

  1. A.N1,000
  2. B.N400
  3. C.N70
  4. D.N20
Show the answer and explanation

Answer: D (N20)

Explanation

Fixed cost is the cost at zero output, N1,000. At 20 units variable cost = 1,400 − 1,000 = N400, so per unit it is 400 ÷ 20 = N20.