Question

The accompanying table gives cost data for a firm that is selling in a purely competitive market. at 6 units of output, total fixed cost is ____ and total cost is ____.

Answer 1

When 6 units of output are produced -

Average fixed cost (AFC) = $25 per unit

Average variable cost (AVC) = $25 per unit

Calculate Total Fixed Cost (TFC) -

TFC = AFC * Output = $25 * 6 = $150

Calculate Total Variable Cost (TVC) -

TVC = AVC * Output = $25 * 6 = $150

Calculate Total Cost (TC) -

TC = TFC + TVC = $150 + $150 = $300

Thus,

At 6 units of output, total fixed cost is $150 and total cost is $300.