The average cost function for a commodity is given by $AC = 0.05x^2-5x+1000+\frac{3000}{x}$ in terms of output $x$. The fixed cost is
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 3000 **
Given average cost:
$AC = 0.05x^{2} - 5x + 1000 + \frac{3000}{x}$
Total cost:
$C = x \cdot AC$
$C = x\left(0.05x^{2} - 5x + 1000 + \frac{3000}{x}\right)$
$C = 0.05x^{3} - 5x^{2} + 1000x + 3000$
Fixed cost = constant term = $3000$