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Question
The following table gives the total cost schedule of a firm. It is also given that the average fixed cost at 4 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.
Q 1 2 3 4 5 6 TC 50 65 75 95 130 185
| Q | 1 | 2 | 3 | 4 | 5 | 6 |
| TC | 50 | 65 | 75 | 95 | 130 | 185 |
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Solution
MC (when output is 1 unit)=TVCn−TVCn−1=30−0=30
Q TC
(Rs.) TFC (4 X Rs.5)
(Rs.) TVC
(Rs.) AFC
(Rs.) AVC
(Rs.) SAC
(Rs.) SMC
(Rs.) 1 50 20 30 20 30 50 30 2 65 20 45 10 22.5 32.5 15
3 75 20 55 6.67 18.33 25 10
4 95 20 75 5 18.75 23.75 20
5 130 20 110 4 22 26 35 6 185 20 165 3.33 27.5 30.83 55
=TVCn−TVCn−1
=30−0
| =30 |
| Q | TC (Rs.) | TFC (4 X Rs.5) (Rs.) | TVC (Rs.) | AFC (Rs.) | AVC (Rs.) | SAC (Rs.) | SMC (Rs.) | |
| 1 | 50 | 20 | 30 | 20 | 30 | 50 | 30 | |
| 2 | 65 | 20 | 45 | 10 | 22.5 | 32.5 | 15 | |
| 3 | 75 | 20 | 55 | 6.67 | 18.33 | 25 | 10 | |
| 4 | 95 | 20 | 75 | 5 | 18.75 | 23.75 | 20 | |
| 5 | 130 | 20 | 110 | 4 | 22 | 26 | 35 | |
| 6 | 185 | 20 | 165 | 3.33 | 27.5 | 30.83 | 55 |
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