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Q.19

Expert-verified
Found in: Page 509

### Economics Today

Book edition 19th
Author(s) Roger Miller
Pages 753 pages
ISBN 9780134478777

# If this firm were to boost its output to 12 units of output and thereby raise its total variable costs to \$54, what would be the resulting average fixed cost, average variable cost, average total cost, and marginal cost?

Average fixed cost is $0.83$, average variable cost is $4.5$, average total cost is $5.33$, and marginal cost is $8$.

See the step by step solution

## Step 1: Introduction

The firm were to boost its output to$12$units of output.

total variable costs increased to$54$

## Step 2: Explanation

The total fixed cost TFC = $10$

Output Q = $12$

Using the formula, the average fixed cost can be found,

$AFC=\frac{TFC}{Q}$$=\frac{10}{12}$$=0.83$

Average variable cost = localid="1652092155917" $\frac{Totalvariablecost}{Q}$

$=\frac{54}{12}=4.5$

## Step 3: Total cost

$\text{Average total cost}=AFC+AVC$

localid="1652511769768" $=4.5+0.83\phantom{\rule{0ex}{0ex}}$

$=5.33$

The total fixed cost TFC = $10$

Total cost = $64$

## Step 4:  Marginal cost

Marginal cost =

$=64-56$

$=8$