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Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1.00 per poster. She has fixed costs of $250.00. Her variable costs are $1,500 for the first thousand posters, $1,200 for the second thousand, and then $800 for each additional thousand posters.

What is her AFC per poster if she prints 1,000 posters?

Verified Answer :

MissPhiladelphia

AFC mean average fixed costs. This is equal to total fixed costs divided by the amount of output. If the output is equal to 1000, then the AFC is

AFC = $250.00 ÷ 1,000
AFC = $ 0.25

I hope I was able to answer your question. Thank you and have a good day.

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