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From the following data of the cost of production of a firm, calculate (i) average fixed cost and (ii) average variable cost of producing 8 units: {:("Output",0,3,8),("TC (Rs)",80,104,152):} |
Answer» Solution :The TOTAL fixed cost will be the same at all the levels of output. For zero output, total cost is Rs 80. At zero output, total variable cost will be zero. HENCE, Rs 80 represents total fixed cost at all levels of output.  The AFC of PRODUCING 8 units is Rs 10 and AVC is Rs 9. |
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