A firm produces 4 units of output with a total cost of $200. If the fixed costs are $50, categorize the average total cost based on the following options: A. Below $50, B. Between $50 and $100, C. Between $100 and $150, D. Above $150. Which category does the average total cost fall into and why?

To find the average total cost, we first need to understand how it is calculated. The average total cost is the total cost divided by the number of units produced. In this case, the total cost is $200 and the firm produces 4 units, so we divide $200 by 4, which gives us an average total cost of $50. Since $50 is the exact value we calculated, it falls into category B, which is between $50 and $100. This means the average total cost is not below $50 and is not above $100, making it a good fit for this range.