A firm producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs.350 to its fixed factors of production whether it produces or not. How much of the average total cost is made up of variable costs?

Rs 100 of the average total cost is made up of variable costs.Step-by-step explanation:Given:Number of output the firm produces= 7 unitsAverage cost of the output= Rs. 150fixed factors of production = Rs.350To Find:How much of the average total cost is made up of variable costs=?Solution:we know that, Average total cost= total cost/ number of output units producedsubstituting the values, we get[tex]150=\frac{\text{Total cost}}{7}[/tex]Total cost= 1050we know that Total fixed cost = 350Total cost = Total fixed cost + Total variable costplug in the known values.1050= 350 + Total variable costTotal variable cost = 1050-350Total variable cost =700For 7th unit [tex]\frac{700}{7}[/tex] = 100