What is the total cost per acre for the farmer given fixed costs of $200 and variable costs of $400?

What is the total cost per acre for the farmer given fixed costs of $200 and variable costs of $400?

• A. $600
• B. $400
• C. $200
• D. $800

Answer: (A)

Total cost per acre is found by adding fixed costs per acre to variable costs per acre. Fixed costs stay the same regardless of production, while variable costs change with output. So with fixed costs of 200 and variable costs of 400, the total cost per acre is 200 + 400 = 600 dollars. That matches the option representing the full sum of both cost components. The other numbers would omit one component or double-count, which isn’t consistent with the formula for total cost per acre.

Total cost per acre is found by adding fixed costs per acre to variable costs per acre. Fixed costs stay the same regardless of production, while variable costs change with output. So with fixed costs of 200 and variable costs of 400, the total cost per acre is 200 + 400 = 600 dollars. That matches the option representing the full sum of both cost components. The other numbers would omit one component or double-count, which isn’t consistent with the formula for total cost per acre.