Total product schedule of a firm at different levels of labour employment is given below. Calculate the firm's total variable cost, total cost, average cost, average variable cost and average fixed cost, if wage rate is Rs. 100 per day and total fixed cost is Rs. 1,000.
Labour Employment (Units) 1 2 3 4 5 6 7 8 9 10
Output (Units) 5 10 17 25 40 56 70 82 90 95

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Solution

Labour
(Units) Output
(Units) TFC
(Rs.) TVC
(Rs.)
TC
(Rs.) AC
(Rs.) AVC
(Rs.) AFC
(Rs.)
1 5 1,000 100 1,100 220 20 200
2 10 1,000 200 1,200 120 20 100
3 17 1,000 300 1,300 76.4 17.6 58.8
4 25 1,000 400 1,400 56 16 40
5 40 1,000 500 1,500 37.5 12.5 25
6 56 1,000 600 1,600 28.5 10.7 17.8
7 70 1,000 700 1,700 24.2 10 14.2
8 82 1,000 800 1,800 21.9 9.7 12.1
9 90 1,000 900 1,900 21.1 10 11.1
10 95 1,000 1,000 2,000 21 10.5 10.5

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Labour Employment (Units)	1	2	3	4	5	6	7	8	9	10
Output (Units)	5	10	17	25	40	56	70	82	90	95

Labour (Units)	Output (Units)	TFC (Rs.)	TVC (Rs.)	TC (Rs.)	AC (Rs.)	AVC (Rs.)	AFC (Rs.)
1	5	1,000	100	1,100	220	20	200
2	10	1,000	200	1,200	120	20	100
3	17	1,000	300	1,300	76.4	17.6	58.8
4	25	1,000	400	1,400	56	16	40
5	40	1,000	500	1,500	37.5	12.5	25
6	56	1,000	600	1,600	28.5	10.7	17.8
7	70	1,000	700	1,700	24.2	10	14.2
8	82	1,000	800	1,800	21.9	9.7	12.1
9	90	1,000	900	1,900	21.1	10	11.1
10	95	1,000	1,000	2,000	21	10.5	10.5