Cost schedule of a firm Output Total Fixed cost TFC(N) Total Variable Cost TVC (N)...
ECONOMICS
WAEC 1993
Cost schedule of a firm
| Output | Total Fixed cost TFC(N) | Total Variable Cost TVC (N) | Total Cost TC (N) | Average Variable AVC(N) | Average Total ATC (N) | Marginal Cost MC(N) |
| 0 | 100 | 0 | 100 | 0 | 100 | - |
| 1 | 100 | 40 | 140 | - | - | - |
| 2 | 100 | 64 | 164 | - | - | - |
| 3 | 100 | 80 | 180 | - | - | - |
| 4 | 100 | 88 | 188 | - | - | - |
| 5 | 100 | 96 | 196 | - | - | - |
From the cost schedule in this table calculate the Average Variable Cost (AVC), Average Total Cost (ATC) and Marginal Cost (MC) of the firm. Show your working clearly.
Explanation
| Output | TFC(N) | TVC (N) | TC (N) | AVC (N) | ATC (N) | MC(N) |
| 0 | 100 | 0 | 100 | 0 | 100 | - |
| 1 | 100 | 40 | 140 | 40 | 140 | 40 |
| 2 | 100 | 64 | 164 | 32 | 82 | 24 |
| 3 | 100 | 80 | 180 | 27 | 60 | 16 |
| 4 | 100 | 88 | 188 | 22 | 47 | 8 |
| 5 | 100 | 96 | 196 | 19.2 | 39.2 | 8 |
AVC = \(\frac{TVC}{Q}\) = 40, 32, 27, 22, 19.2
ATC = \(\frac{TVC}{39.2}\) = 140, 82, 60,47,
MC = TC, TC2 = 40 , 24, 16, 8, 8
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