Omar's Car Wash has average variable costs of $3 and average fixed costs of $4 when it produces 200 units of output (car washes). The firm's total cost isGroup of answer choices$600.$800.$200.$1,400.
Question
Omar's Car Wash has average variable costs of 4 when it produces 200 units of output (car washes). The firm's total cost isGroup of answer choices800.1,400.
Solution
To find the total cost, we need to add the average variable costs and the average fixed costs, and then multiply by the number of units produced.
Step 1: Add average variable costs and average fixed costs. 4 (average fixed cost) = $7
Step 2: Multiply the result by the number of units produced. 1400
So, the firm's total cost is $1400.
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