Question
The numbers of units produced by a firm and the corresponding costs are tabulated below.
No. of unitsTotal cost100Rs 2000250Rs 3500
Assuming constant variable cost per unit, calculate the AFC for 100 units.
No. of unitsTotal cost100Rs 2000250Rs 3500
Assuming constant variable cost per unit, calculate the AFC for 100 units.
Answer: Option A
:
A
Let the fixed cost be F and the variable cost per unit be v.
F +100 v = Rs 2000
F + 250 v = Rs 3500
On solving, we get F = 1000 =TFC and v = 10 = AVC
Now, AFC = TFC / 10 = 1000/100 = Rs 10
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:
A
Let the fixed cost be F and the variable cost per unit be v.
F +100 v = Rs 2000
F + 250 v = Rs 3500
On solving, we get F = 1000 =TFC and v = 10 = AVC
Now, AFC = TFC / 10 = 1000/100 = Rs 10
Was this answer helpful ?
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