At an output of 3,000 units per year, a firm's total variable costs are $1,000 and its average fixed costs are $2. Its total costs per year are:

Managerial Economics: A Problem Solving Approach
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Chapter7: Economies Of Scale And Scope
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At an output of 3,000 units per year, a firm's total variable costs are $1,000 and its average fixed costs are $2. Its total costs per year are: 

Expert Solution
Step 1

The total cost is the minimum amount of money needed to produce some quantity of output. It is the sum of the total fixed and variable costs. That is,

Total cost=Total fixed cost+Total variable cost

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