Multiple choice

Directions: A competitive firm sells his product at market price of Rs. 51 per unit. The fixed cost is Rs. 300 and variable cost for different levels of production are shown in the following table. Use table to answer the question. | Quantity | Variable cost (in Rs.) | Fixed cost | Total Cost | AVC | ATC | MC | | --- | --- | --- | --- | --- | --- | --- | | 0 10 20 30 40 50 | 0 470 980 1850 3400 5950 | | | | | | When production is 30 units, the average variable cost (in Rs.) is

  1. 70.6

  2. 60.6

  3. 61.6

  4. 71.6
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C Correct answer
AI explanation

The average variable cost formula is the total variable cost divided by the quantity produced. From the table, the variable cost for 30 units is Rs. 1850. Dividing 1850 by 30 gives an average variable cost of approximately 61.6.

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