Question

If total cost = 10+Q³, find out AC, AVC, TFC, AFC when Q=5.

Answer 1

TC = 10 + Q³

AC = ${\displaystyle \frac{\text{TC}}{\text{Q}}}$

AC = ${\displaystyle \frac{10+{\text{Q}}^3}{\text{Q}}}$

If Q = 5 x 5 x 5 = 125

AC = ${\displaystyle \frac{10+125}{5}}$ = ${\displaystyle \frac{135}{5}}$ = 27

AVC:

TC = 10 + Q³

TC = TFC + TVC

TVC = Q³

AVC = ${\displaystyle \frac{\text{TVC}}{\text{Q}}}$

= ${\displaystyle \frac{{\text{Q}}^3}{\text{Q}}}$

If Q = 5, then AVC = 5²

AVC = 25

TFC: 

TC = 10 + Q³

TC = TFC + TVC

TFC = 10

AFC: 
AFC = ${\displaystyle \frac{\text{TFC}}{\text{Q}}}$

= ${\displaystyle \frac{10}{5}}$

AFC = 2