Let's break down problem step by step: ## **Step 1: Understanding the Table** The table provides the following columns: - Output - Variable Cost (VC) - Average Variable Cost (AVC) - Fixed Cost (FC) ## **Step 2: Find Data for 400 Units** We are asked for the **average variable cost (AVC) of producing 400 units**. The table does not give AVC directly for 400 units, but let's check the entries: | Output | Variable Cost | AVC | Fixed Cost | |--------|--------------|----------|------------| | 100 | $100 | $5 | $5 | | 250 | $250 | $10 | $5 | | 350 | $350 | $15 | $5 | | 400 | $50 | $20 | $5 | ⟵ This row (output closest to 400) | 425 | $25 | $25 | $5 | | 430 | $30 | $5 | $5 | There seems to be a misalignment in the table for output and variable cost as the values do not match typical AVC calculations. Let's clarify using the standard formula: ## **Step 3: Formula for AVC** \[ \text{AVC} = \frac{\text{Variable Cost}}{\text{Output}} \] For output = 400: - Variable Cost = $50 \[ \text{AVC} = \frac{50}{400} = .125 \] ## **Step 4: Final Answer** ### **Average Variable Cost of Producing 400 Units** \[ \boxed{.125 \text{ (or $.13 per unit, rounded to two decimal places)}} \] --- **Summary Table Calculation:** - Output = 400 - Variable Cost = $50 - AVC = $.125 per unit Let me know if you need further clarification!

# Definitions ## **Variable Cost (VC)** Variable cost refers to costs that change in proportion to the level of production or output. ## **Average Variable Cost (AVC)** Average variable cost is the variable cost per unit of output, calculated as total variable costs divided by total units produced. ## **Fixed Cost (FC)** Fixed cost refers to costs that remain constant regardless of the level of production, such as rent or salaries.