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Omar's Car Wash has average variable costs of $3 and average fixed costs of $4 when it produces 200 units of output (car washes). The firm's total cost isGroup of answer choices$600.$800.$200.$1,400.

Question

Omar's Car Wash has average variable costs of 3andaveragefixedcostsof3 and average fixed costs of 4 when it produces 200 units of output (car washes). The firm's total cost isGroup of answer choices600.600.800.200.200.1,400.

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Solution

To find the total cost, we need to add the average variable costs and the average fixed costs, and then multiply by the number of units produced.

Step 1: Add average variable costs and average fixed costs. 3(averagevariablecost)+3 (average variable cost) + 4 (average fixed cost) = $7

Step 2: Multiply the result by the number of units produced. 7200units=7 * 200 units = 1400

So, the firm's total cost is $1400.

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