Question

Following information is given about a firm :

From this information find out :
(i) Average fixed cost of producing 4 units,
(ii) Average variable cost of producing 5 units,
(iii) Least average cost level of output,
(iv) Marginal cost of producing the `3^(rd)` unit,
(v) Total variable cost of producing 6 unit.

Answer 1

Correct Answer - (i) `₹ 37.50`; (ii) `₹ 170`; (iii) Least AC is at 4 units of output; (iv) `₹ 180;` (v) `₹ 1,110`.

Formulae used :
(i) `TVC = TC - TFC` , (ii) `AC = TC ÷ "Output"`
(iii) `AVC = TVC ÷ "Output"` , (iv) `TFC = TC` at 0 level of output
(v) `AFC = TFC ÷ "Output"` , (vi) `MC_(n) = TC_(n) - TC_(n-1)`