Question

5. If total fixed cost of producing 5 units of output is Rs. 20 and total variable cost is Rs. 50, then what

will be the value of Total cost of producing 5 units of output?

(a) Rs. 30

(b) Rs. 70

(c) Rs. 1000

(d) Rs. 50​

Answer 1

The total cost is Rs 14.

Explanation:

We are given that:

The total fixed cost of producing 5 units of output = Rs 20

Total variable cost = Rs 50

To Find: The total cost of producing 5 units of output= ?

Solution:

Formula:

Average total cost = TC / Q = TVC + TFC / Q  

Now put the values  

Average total cost = Rs 50 + 20 / 5

Average total cost = 70 / 5 = Rs 14