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What will be the AFC of 2 units according to the table given below :
Output 0 1 2
Total cost (in Rs.) 580 689 850
Output 0 1 2
Total cost (in Rs.) 580 689 850
- a)105
- b)135
- c)235
- d)290
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
What will be the AFC of 2 units according to the table given below :Ou...
Calculation of Average Fixed Cost (AFC) of 2 units :
Given,
Total cost for producing 2 units = Rs. 850
Total cost for producing 1 unit = Rs. 689
Total fixed cost for producing 2 units = Total cost for producing 2 units - Total variable cost for producing 2 units
= Rs. 850 - (Rs. 689 x 2)
= Rs. 850 - Rs. 1378
= - Rs. 528
As total fixed cost can not be negative, it means there is some calculation error in the given table.
Therefore, the answer cannot be determined from the given table.
Given,
Total cost for producing 2 units = Rs. 850
Total cost for producing 1 unit = Rs. 689
Total fixed cost for producing 2 units = Total cost for producing 2 units - Total variable cost for producing 2 units
= Rs. 850 - (Rs. 689 x 2)
= Rs. 850 - Rs. 1378
= - Rs. 528
As total fixed cost can not be negative, it means there is some calculation error in the given table.
Therefore, the answer cannot be determined from the given table.
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Community Answer
What will be the AFC of 2 units according to the table given below :Ou...
Well as it is given in the question at 0 output TC is 580...as we know that TFC =TC at 0 level of output... So TFC =Rs 580.. Now we hve to find out AFC of 2nd unit so just put the formula AFC =TFC /output =580 /2=Rs 290.. Hence AFC of 2nd unit is Rs 290
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What will be the AFC of 2 units according to the table given below :Output 0 1 2Total cost (in Rs.) 580 689 850a)105b)135c)235d)290Correct answer is option 'D'. Can you explain this answer?
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