The following table gives the total cost schedule of a firm. It is also given that the average fixed cost at 4 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.
Q | TC |
1 | 50 |
2 | 65 |
3 | 75 |
4 | 95 |
5 | 130 |
6 | 185 |
Given – Average fixed cost at 4 units of output is Rs 5
Therefore, Total Fixed Cost for 4 units will be Rs 20
As we know that the FC remains constant so it will be Rs 20 for all levels of output
SAC = TC / Q
TFC = 20
TVC = TC – TFC
AVC = TVC / Q
AFC = TFC / Q
SMC = TVCN+1 - TVCN