Answer:
Total variable cost = $700
Explanation:
We know,
Total cost = Total fixed cost + Total variable cost
Given,
Average total Cost = $50,
Output = 20 units
Total Cost = Average total cost x output
Total Cost = $50 x 20 units
Total Cost = $1,000
Average fixed cost = $15
Total fixed cost = $15 x 20 units
Total fixed cost = $300
Putting the value in the formula, we can get,
Total cost = Total fixed cost + Total variable cost
or, $1,000 = $300 + Total variable cost
or, Total variable cost = $1,000 - $300
Hence, Total variable cost = $700
