If Total Variable Cost and Total Fixed Cost of Producing 10 Units Are 500 and 200, the Value of Average Cost Would Be?

a) 50

b) 70

c) 20

d) 80

Answer: b) 70

The formula for Total cost of production is = Total variable cost + Total fixed cost

= 500 + 200

= 700

The average cost will be = Total cost of production / Total number of units

= 700/ 10

= 70

Therefore, the average cost will be 70.

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