Multiple choice

Bozzo's burgers is a small restaurant and a price taker. The table below provides the data of Bozzo's output and costs in rupees. | Quantity | Total cost | Fixed cost | Variable cost | Average variable cost | Average total cost | Marginal cost | | --- | --- | --- | --- | --- | --- | --- | | 0 | 100 | | -- | -- | | -- | | 10 | 210 | | | | | | | 20 | 300 | | | | | | | 30 | 400 | | | | | | | 40 | 540 | | | | | | | 50 | 790 | | | | | | | 60 | 1060 | | | | | | What is the total variable cost when 60 burgers are produced?

  1. Rs. 690

  2. Rs. 960

  3. Rs. 110

  4. Rs. 440
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B Correct answer
Explanation

Total cost = Fixed cost + Variable cost. At 0 units, Total cost = 100, so Fixed cost = 100. At 60 units, Total cost = 1060. Variable cost = 1060 - 100 = 960.

AI explanation

Total variable cost is found by subtracting total fixed cost from total cost. The fixed cost is the total cost at zero output, which is Rs. 100. When 60 burgers are produced, the total variable cost is 1060 minus 100, which equals Rs. 960.

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