Q4 of 25 Page 1

When the total fixed cost of producing 100 units is Rs. 30 and the average variable cost is Rs. 3, total cost is: (Choose the correct alternative)

(a) Rs 3


(b) Rs 30


(c) Rs 270


(d) Rs 330

(d) Rs 330

Total Fixed Cost (TFC) (100 units) = Rs. 30


Average variable cost (AVC) (100 units) = Rs 3


Total Variable Cost (TVC)/Number of units = Rs. 3


TVC/100 = 3


TVC = 300


Total cost = TFC+TVC = 30+300 = Rs. 330


More from this chapter

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2

Define fixed cost.

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When the Average Product (AP) is maximum, the Marginal Product (MP) is : (Choose the correct alternative)

(a) Equal to AP


(b) Less than AP


(c) More than AP


(d) Can be any one of the above

 5

Explain the central problem of ‘for whom to produce’.

OR


Explain the central problem of ‘choice of technique.’

 6

What is meant by inelastic demand? Compare it with perfectly inelastic demand.