Question

Quantity of Output	Fixed Cost	Variable Cost	Total Cost	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
1		$23	$33
2		$38
3			$70
4		$64
5			$110
6		$118
7		$143
8			$185

Refer to Table 13-14. What is the average fixed cost of producing 8 units of output?

Answer 1

Quantity of output	Fixed cost	Variable cost	Total cost	Average fixed cost	average variable cost	Average total cost	Marginal cost
1	10	23	33	10.00	23.00	33.00	----
2	10	38	48	5.00	19.00	24.00	15.00
3	10	60	70	3.33	20.00	23.33	22.00
4	10	64	74	2.50	16.00	18.50	4.00
5	10	100	110	2.00	20.00	22.00	36.00
6	10	118	128	1.67	19.67	21.33	18.00
7	10	143	153	1.43	20.43	21.86	25.00
8	10	175	185	1.25	21.88	23.13	32.00

Fixed cost = Total cost - Total variable cost

At Quantity of 1 unit,

Fixed cost = 33 -23 = 10

And, Fixed cost remains same at each level of quantity.

Total variable cost = Total cost - Fixed cost

Total cost = Total variable cost + fixed cost

Average fixed cost = Fixed cost / Quantity

Average variable cost = Total variable cost / Quantity

Average total cost = Total cost / Quantity

Marginal cost = (Change in total cost / change in quantity.)

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The aveage fixed cost of producing 8 units of output is $1.25

Answer: $1.25