Question

Suppose the total cost function of a firm is given by TC=Q³-21Q²+360Q+3025 then, a.determine the total fixed cost for producing 800 and 400 units of output,respectively b.what is average fixed cost for 800 and 400 units of output

Answer 1

a.

$$FC=3025$$

b.

$$AFC\vert_{Q=800}=\frac{3025}{800}=3.78$$

$$AFC\vert_{Q=400}=\frac{3025}{400}=7.56$$