Quantity of Singlets Short Run Total Costs (N)
0 1,000
10 1,200
20 1,400
30 1,600
40 1,800

The short run total costs for different levels of output for a firm producing singlets are shown above. Calculate the variable cost per unit at an output of 20.

  • A N1000
  • B N400
  • C N70
  • D N20
jamb 1992economics

The correct answer is D. N20

To calculate the variable cost per unit at an output of 20, we first need to find the fixed costs and then subtract them from the total costs.
Given:Total cost at an output of 20 = N1,400

Total fixed cost = N1,000 (from the cost at 0 quantity)

Variable cost = Total cost - Total fixed cost

Variable cost at an output of 20 = N1,400 - N1,000 = N400

Now, to find the variable cost per unit, we divide the variable cost by the quantity produced:

Variable cost per unit at an output of 20 = Variable cost / Quantity

Variable cost per unit at an output of 20 = N400 / 20 = N20

Previous question Next question