Answer to Question #244850 in Microeconomics for Buhle

Question

Use the following data to answer the following question.

Total units total cost
0 100
1 110
2 130
3 166
4 220
5 300

The average fixed cost of the fifth unit is_____

Answer 1

The average fixed cost of the fifth unit is 20

Explanation :

Fixed Cost doesn't change with the output. So at every level of output fixed cost remains same. At 0 quantity total cost is equals to fixed cost. So, fixed cost =100 at every level of output.

$AFC =\frac{FC }{Q}\\ =\frac{100}{5}\\ =20.$