A firm's Total Fixed Cost is Rs. 100, and its Total Variable Cost at various output levels is given below. Complete the cost schedule by computing TC, AFC, AVC, ATC and MC at each output level.

| Q | TFC | TVC | TC | AFC | AVC | ATC | MC |
|---|---|---|---|---|---|---|---|
| 0 |

Question

A firm's Total Fixed Cost is Rs. 100, and its Total Variable Cost at various output levels is given below. Complete the cost schedule by computing TC, AFC, AVC, ATC and MC at each output level.

| Q | TFC | TVC | TC | AFC | AVC | ATC | MC |
|---|---|---|---|---|---|---|---|
| 0 | 100 | 0 | | | | | |
| 1 | 100 | 60 | | | | | |
| 2 | 100 | 100 | | | | | |
| 3 | 100 | 130 | | | | | |
| 4 | 100 | 150 | | | | | |
| 5 | 100 | 180 | | | | | |
| 6 | 100 | 240 | | | | | |

Accepted Answer

**Total Cost** ($TC=TFC+TVC$), row by row:
$$TC_0=100,\ TC_1=160,\ TC_2=200,\ TC_3=230,\ TC_4=250,\ TC_5=280,\ TC_6=340$$

**Average Fixed Cost** ($AFC=TFC/Q$, for Q ≥ 1):
$$AFC_1=100,\ AFC_2=50,\ AFC_3=33.33,\ AFC_4=25,\ AFC_5=20,\ AFC_6=16.67$$

**Average Variable Cost** ($AVC=TVC/Q$):
$$AVC_1=60,\ AVC_2=50,\ AVC_3=43.33,\ AVC_4=37.5,\ AVC_5=36,\ AVC_6=40$$

**Average Total Cost** ($ATC=TC/Q$, or equivalently $AFC+AVC$):
$$ATC_1=160,\ ATC_2=100,\ ATC_3=76.67,\ ATC_4=62.5,\ ATC_5=56,\ ATC_6=56.67$$

**Marginal Cost** ($MC=\Delta TC/\Delta Q$, the difference between consecutive TC values):
$$MC_1=160-100=60,\ MC_2=200-160=40,\ MC_3=230-200=30$$
$$MC_4=250-230=20,\ MC_5=280-250=30,\ MC_6=340-280=60$$

The completed table is:

| Q | TFC | TVC | TC | AFC | AVC | ATC | MC |
|---|---|---|---|---|---|---|---|
| 0 | 100 | 0 | 100 | — | — | — | — |
| 1 | 100 | 60 | 160 | 100 | 60 | 160 | 60 |
| 2 | 100 | 100 | 200 | 50 | 50 | 100 | 40 |
| 3 | 100 | 130 | 230 | 33.33 | 43.33 | 76.67 | 30 |
| 4 | 100 | 150 | 250 | 25 | 37.5 | 62.5 | 20 |
| 5 | 100 | 180 | 280 | 20 | 36 | 56 | 30 | …

Q	TFC	TVC	TC	AFC	AVC	ATC	MC
0	100	0	100	—	—	—	—
1	100	60	160	100	60	160	60
2	100	100	200	50	50	100	40
3	100	130	230	33.33	43.33	76.67	30
4	100	150	250	25	37.5	62.5	20
5	100	180	280	20	36	56	30

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