Question

3)

If the total cost of producing 6 units is $310 for the following firm, what is their total fixed cost?

Quantity	0	1	2	3	4	5	6	7
MC	-	50	40	30	40	50	60	70

Group of answer choices

a $40

b $0

c $250

d None of these answers

4)

Suppose a firm faces the following costs:

Quantity	1	2	3	4	5	6
ATC	800	500	366	325	320	333
AFC	500	250	167	125	100	83.3

   

What is the total variable cost at a quantity of 4 units?

Group of answer choices

a 450

b 200

c 1800

d 800

Answer 1

Answer 3: (a) 40

Answer. 4: (d) 800

Explanation:

In the first question, Total variable cost can be found out by adding up MC for each quantity. Then we are given that total cost for 6 units is 310. And we have found out that total variable cost for 6 units is 270. So remaining total fixed cost will be 310-270 = 40.

In the second question. AVC can be found out by subtracting AFC from ATC. Then total variable cost is equal to average variable cost multiplied by quantity. To we have also found TVC column then. And you can see that total variable cost at 4 units is 800.

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