Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
What is the marginal cost for the first unit
20
30
50
Or 60
Transcribed Image Text:FC
VC
TC
MC
AFC
AVC
ATC
1
160
65
3
10
20
4
55
28
Expert Solution
Step 1
We have the value of AFC at the 2nd unit of output, it is 65
Find the value of Fixed Cost (FC)
FC = AFC * Q
=> FC = 65 * 2
=> FC = 130
Fixed cost remains the same at each level of output.
So, the fixed cost at zero unit of output will be 130.
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