Answer to Question #195325 in Microeconomics for Nik P

Question

Q=2 TC=100

Q=3 TC=120

How much is FC?

Answer 1

Given,

At quantity 2 Total cost is 100

Therefore Average cost is  $\frac{100}{2}=50$

At quantity 3 Total cost is 120

Therefore Average cost is$\frac{120}{3}=40$

 Marginal cost would be$=\frac{\delta TC}{\delta Q}$

$=\frac{20}{1}=20$

Since, Total cost (TC) is the summation of the Variable cost (VC) and the Fixed cost (FC),

TC = FC + VC,    FC = TC - VC

Even at 0 quantity there will remain some Fixed cost.

Therefore FC = TC at 0 quantity

 

Since neither the variable cost nor the Total cost at 0 quantity is given therefore the problem cannot be solved.