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JAMB Economics 1999 Question 20

Question 20

Theory of Costs and Revenue

Given that the total fixed cost is ₦1 000, total variable cost ₦2 500 and the output, 100 units. Find the average total cost of producing one unit

  1. A.₦60
  2. B.₦45
  3. C.₦35
  4. D.₦30
Show the answer and explanation

Answer: C (₦35)

Explanation

Total cost = 1,000 + 2,500 = ₦3,500. Average total cost = 3,500 ÷ 100 = ₦35.