cost micro economics www.eakanchha.com
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1. The document calculates total fixed cost (TFC), total variable cost (TVC), and marginal cost (MC) for a company with an average fixed cost (AFC) of 60 and multiple levels of output. 2. TFC is calculated as AFC x Output for each level. TVC is calculated as Total Cost (TC) - TFC. Marginal Cost is calculated as the change in Total Cost between levels of output. 3. The calculations show TFC and AFC remaining constant while TVC and MC change with different levels of output. The sum of MC equals TVC, and TC equals the sum of TFC and TVC.
cost micro economics www.eakanchha.com
- 1. OUTPUT AFC MC TC 1 72 2 10 3 20 8 4 99 5 12 10 The value given in question are written in red colour. Solution I will write in black colour. Q.1
- 2. OUTPUT AFC MC TC TFC TVC 1 72 2 10 3 20 8 4 99 5 12 10 The value given in question are written in red colour. Solution I will write in black colour. TFC and TVC will be required to find these values. Therefore I have added two columns more i.e. TFC and TVC.
- 3. OUTPUT AFC MC TC TFC TVC 1 72 60 2 10 60 8 60 4 99 60 5 12 10 60 TFC= AFC OUTPUT. TFC=203=60. and TFC remain same at all the level of output 203
- 4. OUTPUT AFC MC TC TFC TVC 1 72 60 72-60 = 12 2 10 60 3 20 8 60 4 99 60 5 12 10 60 TVC=TC-TFC.
- 5. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60 3 20 8 60 4 99 60 5 12 10 60 WHEN, OUTPUT=1 : TVC=MC.
- 6. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60 12+10 = 22 3 20 8 60 4 99 60 5 12 10 60 金MC=TVC.
- 7. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 60 4 99 60 5 12 10 60 TC=TFC+TVC.
- 8. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 60 12+10+8 = 30 4 99 60 5 12 10 60 MC=TVC.
- 9. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 60 5 12 10 60 TC=TFC+TVC.
- 10. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 - 90 = 9 99 60 5 12 10 60 MCn =TC n TC n-1.
- 11. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 - 90 = 9 99 60 5 12 10 60 MCn =TC n TC n-1.
- 12. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 - 90 = 9 99 60 12+10+8+9 = 39 5 12 10 60 金MC= TVC.
- 13. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 - 90 = 9 99 60 12+10+8+9 = 39 5 12 10 60 12 + 10 + 8 + 9 +10 = 49 金MC= TVC.
- 14. OUTPUT AFC MC TC TFC TVC 1 12 72 60 72-60 = 12 2 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 99 - 90 = 9 99 60 12+10+8+9 = 39 5 12 10 60+49 = 109 60 12 + 10 + 8 + 9 +10 = 49 TC=TFC+TVC.
- 15. OUTPUT AFC MC TC TFC TVC 1 60歎1= 60 12 72 60 72-60 = 12 2 60歎2= 30 10 60+22 = 82 60 12+10 = 22 3 20 8 30+60 = 90 60 12+10+8 = 30 4 60歎4= 15 99 - 90 = 9 99 60 12+10+8+9 = 39 5 12 10 60+49 = 109 60 12 + 10 + 8 + 9 +10 = 49 AFC=TFC歎OUTPUT.