Question

The following table gives the total cost schedule of a firm. It is also given that the average fixed cost at four units of output is Rs 5/-. Find the TVC, TFC, AVC, AFC, SAC and SMC schedules of the firm for the corresponding values of output. L TPL 1 50 2 65 3 75 4 95 5 130 6 185

Answer 1

Answer:

7

Explanation:

ans the question of is

Answer 2

The answer is stated below:

Explanation:

Computing TFC as:

TFC = 4 units at Rs 5

where

TFC = 4 × Rs 5

TFC = Rs 20

Note: TFC is fixed for every quantity (Q)

Therefore, from Q1 to Q6, the TFC will be 20

Now computing TVC as:

Q1

TVC = TC - TFC

TVC = 50 - 20

TVC = 30

Note : Computing TVC for the Quantities till Q6

The formula for computing the AFC as:

AFC = TFC / Q

Computing AFC for Q1 as:

AFC = 20/1

AFC = 20

Note : Computing AFC for the Quantities till Q6

The formula for computing the AVC as:

AVC = TVC / Q

Computing the AVC for Q1 as:

AVC = 30/1

AVC = 30

Note : Computing AVC for the Quantities till Q6

The formula for computing the SAC as:

SAC = AFC + AVC

Computing the SAC for Q1 as:

SAC = 20 + 30

SAC = 50

Note : Computing SAC for the Quantities till Q6

The formula for computing the SMC as:

SMC = TC(n) - TC(n-1)

Computing the SMC for Q1 as:

SMC = 50 - 20

SMC = 30

Note : Computing SMC for the Quantities till Q6

The following Schedule is shown below:

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