Firms’ costs, revenue and objectives — practice question

For a firm, the fixed costs for its daily output are $200$. The table gives its daily total variable costs. Output (units): $1, 2, 3, 4$ Total variable costs ($): $300, 400, 700, 800$ What conclusion can be drawn about the firm’s average total cost?

• Ait falls continuously
• Bit is highest at output 4 units
• Cit is lowest at output 4 units
• Dit rises continuously