Calculate average variable cost and marginal cost from the follow… - Vidyadip

Question

Calculate average variable cost and marginal cost from the following table:

Units of Output	Total Cost
0	75
1	95
2	110

✓

Answer

The total fixed cost will be same at all the levels of output, ranging from zero to two. For zero output, total cost is ₹ 75. At zero output, total variable cost will be zero. Hence, ₹ 75 represents the total fixed cost at all levels of output.

Units of Output	TC (Given)	TFC	TVC = TC – TFC	$\text{AVC}=\frac{\text{TVC}}{\text{Output}}$	$\text{MC}=\frac{\Delta\text{TC}}{\Delta\text{Output}}$
0	75	75	0	-	-
1	95	75	20	20	20
2	110	75	35	17.5	15

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