Question

1 poin
If average fixed cost ia
rupees 40 and average
variable cost is rupees 80
for an output level of 10
then the total cost is *​

Answer 1

Answer:

ANSWER

(i) AFC (of fourth unit)=Rs.20;

Note: This is because, TC=TFC+TVC and thus in 1st Unit, 80(TC)=80(TFC)+0(TVC).

(ii) AVC (of fourth unit)=Rs.19;

Note: This is because, AVC=

Q

TTCand thus in 4th Unit, 19(AVC)= 4x(Q)156(TC)

(iii) Marginal cost (of fourth unit)=Rs.16

Note: This is because, MC=TC

(n+1)−TC n n and thus in 4th Unit, 16(MC)=156(TC (n+1))−140(TTC )