Question

How do I calculate AVC (Average Variable Cost)?

TABLE FOR COMPUTATION OF PROBLEM 23-4
Total Output and Sales	Total Costs	Market Price	Total Revenues	Total Profit	Average Total Cost (ATC)	Average Variable Cost (AVC)	Marginal Cost (MC)	Marginal Revenue (MR)
0	5	10	0	-5	0	0	--	--
1	9	10	10	1	9	4	4	10
2	11	10	20	9	5.5	3	2	10
3	12	10	30	18	4		1	10
4	14	10	40	26	3.5		2	10
5	18	10	50	32	3.6		4	10
6	24	10	60	36	4		6	10
7	32	10	70	38	4.57		8	10
8	42	10	80	38	5.25		10	10
9	54	10	90	36	6		12	10
10	68	10	100	30	6.8		14	10

Answer 1

Variable costs are 0 when output is 0
at this point TC=FC
So we know fixed costs are 5
Deduct 5 from TC at each output level to get VC
Now AVC=VC/Output

Total Output and Sales	Total Costs	Market Price	Total Revenues	Total Profit	VC=TC-5	Average Total Cost (ATC)	Average Variable Cost (AVC)	Marginal Cost (MC)	Marginal Revenue (MR)
0	5	10	0	-5	0	0	--	--	--
1	9	10	10	1	4	9	4	4	10
2	11	10	20	9	6	5.5	3	2	10
3	12	10	30	18	7	4	2.33333	1	10
4	14	10	40	26	9	3.5	2.25	2	10
5	18	10	50	32	13	3.6	2.6	4	10
6	24	10	60	36	19	4	3.16667	6	10
7	32	10	70	38	27	4.57	3.85714	8	10
8	42	10	80	38	37	5.25	4.625	10	10
9	54	10	90	36	49	6	5.44444	12	10
10	68	10	100	30	63	6.8	6.3	14	10