Calculate TC and AVC of a firm at each given level of output from its cost schedule
given below: 5
Output 1 2 3 4 5 6
Average Fixed Cost (AFC)(Rs) 60 30 20 15 12 10
Marginal Cost (MC) (Rs) 32 30 28 30 35 43
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Explanation:
The AFC is the fixed cost per unit of output, and AVC is the variable cost per unit of output. In the case of Bob's Bakery, we said earlier that the firm can produce 100 loaves with FC = 40, VC = 500, and TC = 540. Therefore, ATC = TC/Q = 540/100 = 5.4. Also, AFC = 40/100 = 0.4 and AVC = 500/100
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