Question

Use the total cost(TC) schedule that is presented in the the table below to calculate average total cost, average variable cost, average fixed cost and marginal cost when output (Q) is equal to 6

Q	TC
0	5
1	7
2	8
3	10
4	14
5	20
6	28
7	38
8	50
9	72

Answer 1

We can rewrite the above information in the following table

Q	TC	TVC=TC-TFC	TFC	MC
0	5	0	5	0
1	7	2	5	2
2	8	3	5	1
3	10	5	5	2
4	14	9	5	4
5	20	15	5	6
6	28	23	5	8
7	38	33	5	10
8	50	45	5	12
9	72	67	5	22

Please note that TC= Total variable cost(TVC) + Total Fixed Cost(TFC)

Marginal Cost or MC = Cost of producing an additional output

Here TFC = 5 (Constant)

We see from the above table, when Q= 6,

  TC= 28, TFC= 5, TVC=23 and MC =8