# Economics

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5. A firm's marginal cost of production is constant at \$5 per unit, and its fixed costs are \$20. Draw its total, average variable and average costs.

Marginal Cost (MC): \$5 per unit
Fixed Cost (FC): \$20
Total Cost (TC): \$25
Average Variable Cost (AVC): \$5

FC is always going to be constant at \$20; however, VC is the change in cost as an increase in cost of product to produce more.

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