Question

Complete the following table:

Output (Units)	Total Cost (Rs.)	Total Variable Cost (Rs.)	Marginal Cost (Rs.)
$0$ $1$ $2$	$12$ $18$ $21$

Answer 1

Output (Units)	Total Cost (Rs.)	Total Variable Cost (Rs.)	Marginal Cost (Rs.)
$0$ $1$ $2$	$12$ $18$ $21$	- $18-12=6$ $21-12=9$	- $18-12=6$ $21-18=3$

The fixed cost is to be incurred even when output is zero. Thus, in the above example, $Rs.12$ is fixed cost. The variable cost is the difference between total cost and fixed cost.