Let's break the problem down step by step: ### Step 1: Extract Relevant Data From the table, the **Variable Cost** and **Output** columns are most important. | Labor | Output | Variable Cost | |-------|--------|---------------| | | | $ | | 1 | 100 | $5 | | 2 | 250 | $10 | | 3 | 350 | $15 | | 4 | 400 | $20 | | 5 | 430 | $30 | We are asked for the **average variable cost (AVC) of producing 400 units of output**. ### Step 2: Find Variable Cost at 400 Output From the table, at 400 units of output, the Variable Cost is **$20**. ### Step 3: Calculate Average Variable Cost Average Variable Cost (AVC) is calculated as: \[ \text{AVC} = \frac{\text{Variable Cost}}{\text{Output}} \] Plug in the numbers: \[ \text{AVC} = \frac{20}{400} = .05 \] ### Step 4: State the Final Answer The average variable cost of producing 400 units of output is **$.05**. --- **Final Answer:** \[ \boxed{.05} \]

# Average Variable Cost Calculation ## Step 1: Extract Relevant Data From the provided table, we will focus on the **Output** and **Variable Cost** columns: | Labor | Output | Variable Cost | |-------|--------|---------------| | 1 | 100 | $5 | | 2 | 250 | $10 | | 3 | 350 | $15 | | 4 | 400 | $20 | | 5 | 430 | $30 | ## Step 2: Identify Variable Cost at 400 Output At **400 units** of output, the **Variable Cost** is **$20**. ## Step 3: Calculate Average Variable Cost The formula for Average Variable Cost (AVC) is: \[ \text{AVC} = \frac{\text{Variable Cost}}{\text{Output}} \] Substituting the values: \[ \text{AVC} = \frac{20}{400} = 0.05 \] ## Step 4: State the Final Answer The average variable cost of producing **400 units** of output is: \[ \boxed{0.05} \]

## Explanation of Average Variable Cost Calculation To calculate Average Variable Cost (AVC) at 400 units of output, we use the formula: \[ \text{AVC} = \frac{\text{Variable Cost}}{\text{Output}} \] At 400 units, the Variable Cost is $20. Therefore, \[ \text{AVC} = \frac{20}{400} = 0.05 \] This indicates the cost per unit of output produced.