Chapter 22, Problem 7P

To determine

The total fixed costs, the total variable costs and the total marginal costs at a given output.

Concept Introduction:

Total fixed cost: It is the sum of all fixed cost for producing the output. The TFC doesn’t change with output. It is the cost on building, plant and machinery etc...

          TFC=

Total variable cost: It is the sum of all variable cost in the economy; the variable cost varies with the level of output.

          TVC

Total cost: Total cost is the sum of both total variable cost and total fixed cost.

Marginal cost: It is the additional cost derived from producing an additional unit of the commodity.

          MC=