In a short run cost function capitalunit 30 Laborworker 20
In a short run cost function, capital/unit = $30, Labor/worker = $20 and K=10, how to solve for and value of total variable cost? My solution total variable cost does not intersect Total fixed cost and Total cost curves and I do not understand why?
Solution
In the given question, cost function is not given then how can you find fixed or variable cost. But it is not compulsory that TVC must intersect TFC. TFC may be too high. TVC may lie below TVC. TC is parreller to TVC. It also does not intersect TFC. It rather starts from the level fo TFC.

