Chapter 7, Problem 1TY

To determine

To find: The table showing TFC and AFC and the curve of these costs.

Explanation of Solution

Below is the complete table. Here, the average fixed cost is calculated by dividing the total fixed cost by outputs.

  $AFC=\frac{TFC}{Q}$

Output	Total Fixed cost (fig. in thousands)	AFC (fig. in thousands)
0	360	0
1	360	360
2	360	180
3	360	120
4	360	90
5	360	72
6	360	60

Below is the curve that shows the total fixed cost curve and the average fixed cost curve. Here, the horizontal axis shows the output. While the vertical axis shows the price or costs.