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Suppose a firm has a fixed cost of $20,000 and a $5 variable cost for every unit it produces. If it produces 100 units, fixed cost will be equal to $ 20000 20000 Correct , and variable cost will be equal to $ 20500 20500 Incorrect . Suppose a firm has a fixed cost of $20,000 and a $5 variable cost for every unit it produces. If it produces 0 units, fixed cost will be equal to $ 20000 20000 Correct , and variable cost will be equal to $ 20000 20000 Incorrect .

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Answer:

$ 20000

$500

$ 20000

0

Explanation:

Fixed cost is cost that does not vary with output. It remains the same regardless of output produced.

Fixed cost would be $20,000 regardless of the output produced.

Variable costs vary with output level.

If 100 units are produced and variable cost per unit is $5, variable cost would be 100 × $5 = $500

If 0 unit is produced and variable cost per unit is $5, variable cost would be 0 x $5 = 0

Total cost is the sum of Fixed cost and variable cost

I hope my answer helps you

The fixed cost is $ 20000

The variable cost is $500

The fixed cost is $20000

The variable cost is $0.

  • The calculation is as follows:

The fixed cost is $20,000

The variable cost is

= 100 units × $5

= $500

The fixed cost when 0 units is produced so it is $20,000

And, the variable cost is $0.

Therefore we can conclude that

The fixed cost is $ 20000

The variable cost is $500

The fixed cost is $20000

The variable cost is $0.

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