NABTEB Economics 2024 Objective — Question 20

Question 20 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2024 Objective paper, with the correct answer and a full explanation.

The fixed 100 units of a good is $600. If the variable cost is $400, the average total cost of one unit of the good is

A. A. $4
B. B. $6
C. C. $8
D. D. $10Correct

Explanation

Given: Fixed cost (FC)=$600, Variable cost (VC)=$400, Output (Q)=100 units. Total cost TC=FC+VC=$600+$400=$1000. ATC=TC/Q=$1000/100=$10.00.

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