When production is 40 units, the average total cost is ________.

Rs. 48.40

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Rs. 75.50

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Rs. 85

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Rs. 92.50

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Solution

The correct option is D Rs. 92.50
$A T C = \frac{T C}{Q t y}$
$T C = F C + V C$
$T C = 300 + 3, 400 = 3, 700$
$A T C = \frac{3700}{40} = 92.5$
Quantity
(Q) Variable cost
(VC)
Fixed cost
(FC) Total cost
(TC) Average variable
cost (AVC)
Average total
cost (ATC) Marginal cost
(MC)
0 0 300 300 - - -
5 250 300 550 50 110 50
10 470 300 770 47 77 44
15 700 300 1000 46.67 66.67 46
20 980 300 1280 49 64 56
25 1350 300 1650 54 66 74
30 1850 300 2150 61.67 71.67 100
35 2520 300 2820 72 80.57 134
40 3400 300 3700 85 92.5 176
45 4530 300 4830 100.67 107.33 226
50 5950 300 6250 119 125 284

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Quantity (Q)	Variable cost (VC)	Fixed cost (FC)	Total cost (TC)	Average variable cost (AVC)	Average total cost (ATC)	Marginal cost (MC)
0	0	300	300	-	-	-
5	250	300	550	50	110	50
10	470	300	770	47	77	44
15	700	300	1000	46.67	66.67	46
20	980	300	1280	49	64	56
25	1350	300	1650	54	66	74
30	1850	300	2150	61.67	71.67	100
35	2520	300	2820	72	80.57	134
40	3400	300	3700	85	92.5	176
45	4530	300	4830	100.67	107.33	226
50	5950	300	6250	119	125	284