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Average variable cost of production

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Reference no: EM132021361

At the current usage level of a single variable input (used in conjunction with fixed quantities of other inputs), a firm finds that the average productivity of the variable input is 4 units of output per unit of input. The price of the variable input is $16. At its current level of output the firm's average fixed cost is $20 per unit of output. The average variable cost of production is therefore :

A. $4 per unit of output

B. $9 per unit of output

C. $16 per unit of output

D. $64 per unit of output

Explain your answer.

Reference no: EM132021361

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