Question

A firm’s SMC schedule is shown in the following table. The total fixed cost of the firm is Rs 100/-. Find the TVC, TC, AVC and SAC schedules of the firm.

L	TPL
0	−
1	500
2	300
3	200
4	300
5	500
6	800

Answer 1

Q (units)	SMC (Rs)	TFC = Rs 100 (Rs)	TVCn = SMCn + TVCn-1 (Rs)	TC = TVC + TFC (Rs)	`"AVC"="TVC"/Q` (Rs)	`"SAC"="TC"/Q` (Rs)
0	−	100	−	100	−	−
1	500	100	500	500 + 100 = 600	`500/1=500`	`600/1=600`
2	300	100	300 + 500 = 800	800 + 100 = 900	`800/2=400`	`900/2=450`
3	200	100	200 + 800 = 1000	1000 + 100 = 1100	`1000/3=333.33`	`1100/3=366.67`
4	300	100	300 + 1000 = 1300	1300 + 100 = 1400	`1300/4=325`	`1400/4=350`
5	500	100	500 + 1300 = 1800	1800 + 100 = 1900	`1800/5=360`	`1900/5=380`
6	800	100	800 + 1800 = 2600	2600 + 100 = 2700	`2600/6=433.33`	`2700/6=450`