If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35, what is the firm's average fixed cost at that level of output? 0, $50, $65 , or $15

We know that the total cost (TC) is the sum of the total variable cost (TVC) and the total fixed cost (TFC). That is, \[ \text{TC} = \text{TVC} + \text{TFC} \] 1. Given that the average variable cost (AVC) is \( \$35 \) and the firm produces 20 units of output, the total variable cost is: \[ \text{TVC} = \text{AVC} \times \text{output} = 35 \times 20 = 700 \] 2. The total fixed cost can be obtained by subtracting the total variable cost from the total cost: \[ \text{TFC} = \text{TC} - \text{TVC} = 1000 - 700 = 300 \] 3. Finally, the average fixed cost (AFC) is the total fixed cost divided by the number of units produced: \[ \text{AFC} = \frac{\text{TFC}}{\text{output}} = \frac{300}{20} = 15 \] Thus, the firm's average fixed cost at 20 units of output is \( \$15 \).