Advertisements
Advertisements
Question
The following table gives the total cost schedule of a firm. It is also given that the average fixed cost at four 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.
|
L |
TPL |
|
1 |
50 |
|
2 |
65 |
|
3 |
75 |
|
4 |
95 |
|
5 |
130 |
|
6 |
185 |
Solution
|
Q (units) |
TC (Rs) |
TFC = Rs 20 (Rs) |
TVC = TC − TFC (Rs) |
`"AVC"="TVC"/Q` (Rs) |
`"AFC"="TFC"/Q` (Rs) |
SAC = AFC + AVC (Rs) |
SMC = TCn − TCn−1 (Rs) |
|
1 |
50 |
20 |
50 − 20 = 30 |
`30/1=30` |
`20/1=20` |
20 + 30 = 50 |
50 − 20 = 30 |
|
2 |
65 |
20 |
65 − 20 = 45 |
`45/2=22.5` |
`20/2=10` |
10 + 22.5 = 32.5 |
65 − 50 = 15 |
|
3 |
75 |
20 |
75 − 20 = 55 |
`55/3=18.33` |
`20/3=6.66` |
6.66 + 18.33 = 24.99 |
75 − 65 = 10 |
|
4 |
95 |
20 |
95 − 20 = 75 |
`75/4=18.75` |
`20/4=5` |
5 + 18.75 = 23.75 |
95 − 75 = 20 |
|
5 |
130 |
20 |
130 − 20 = 110 |
`110/5=22` |
`20/5=4` |
4 + 22 = 26 |
130 − 95 = 35 |
|
6 |
185 |
20 |
185 − 20 =165 |
`165/6=27.5` |
`20/6=3.33` |
3.33 + 27.5 = 30.83 |
185 − 130 = 55 |
APPEARS IN
RELATED QUESTIONS
Define marginal cost.
From the following information about a firm, find the firm's equilibrium output in terms of marginal cost and marginal revenue. Give reasons. Also, find profit at this output.
| Output (units) | Total Revenue (Rs) |
Total Cost (Rs) |
| 1 | 8 | 10 |
| 2 | 16 | 18 |
| 3 | 24 | 23 |
| 4 | 32 | 31 |
| 5 | 40 | 41 |
Why is the short run marginal cost curve ‘U’-shaped?
What do the long run marginal cost and the average cost curves look like?
The following table shows the total cost schedule of a firm. What is the total fixed cost schedule of this firm?
Calculate the TVC, AFC, AVC, SAC and SMC schedules of the firm.
|
L |
TPL |
|
0 |
10 |
|
1 |
30 |
|
2 |
45 |
|
3 |
55 |
|
4 |
70 |
|
5 |
90 |
|
6 |
120 |
Calculate Total variable cost and Marginal cost from the data given below.
| Output (units) | 0 | 1 | 2 | 3 |
| Total cost | 40 | 60 | 78 | 97 |
Given that the fixed cost is Rs. 30. Calculate TVC and TC from the following data:
| Output (units) | 0 | 1 | 2 | 3 |
| Marginal Cost | 0 | 10 | 15 | 25 |
