Homework SourseCan some one please help TFC TVC If there is no production
Can some one please help?
= TFC + TVC. If there is no production (Q = 0), how much will TVC be?
Q
TC
TFC
TVC
AVC
ATC
MC
0
$4
$_____
$_____
$_____
$_____
$_____
1
7
_____
_____
_____
_____
_____
2
9
_____
_____
_____
_____
_____
3
10
_____
_____
_____
_____
_____
4
11
_____
_____
_____
_____
_____
5
13
_____
_____
_____
_____
_____
6
17
_____
_____
_____
_____
_____
7
22
_____
_____
_____
_____
_____
| Q | TC | TFC | TVC | AVC | ATC | MC |
| 0 | $4 | $_____ | $_____ | $_____ | $_____ | $_____ |
| 1 | 7 | _____ | _____ | _____ | _____ | _____ |
| 2 | 9 | _____ | _____ | _____ | _____ | _____ |
| 3 | 10 | _____ | _____ | _____ | _____ | _____ |
| 4 | 11 | _____ | _____ | _____ | _____ | _____ |
| 5 | 13 | _____ | _____ | _____ | _____ | _____ |
| 6 | 17 | _____ | _____ | _____ | _____ | _____ |
| 7 | 22 | _____ | _____ | _____ | _____ | _____ |
Solution
Total variable cost or TVC refers to the total expenditure incurred on the variable factors.
Variable factors are those factors whose quantity changes as output produced changes. In case output produced is zero, then zero quantity of variable factors is used. In such case, TVC is also $0.
So, if there is no production (Q=0), TVC will be $0.
TC at (Q = 0) is the TFC.
So, TFC is $4.
TFC remains same irrespective of the level of output produced.
Following is the complete table -
TVC
(TC - TFC)
AVC
(TVC/Q)
ATC
(TC/Q)
MC
(TCn - TCn-1)
| Q | TC | TFC | TVC (TC - TFC) | AVC (TVC/Q) | ATC (TC/Q) | MC (TCn - TCn-1) |
| 0 | 4 | 4 | 0 | - | - | - |
| 1 | 7 | 4 | 3 | 3 | 7 | (7 - 4) 3 |
| 2 | 9 | 4 | 5 | 2.5 | 4.5 | (9 - 7) 2 |
| 3 | 10 | 4 | 6 | 2 | 3.33 | (10 - 9) 1 |
| 4 | 11 | 4 | 7 | 1.75 | 2.75 | (11 - 10) 1 |
| 5 | 13 | 4 | 9 | 1.8 | 2.60 | (13 - 11) 2 |
| 6 | 17 | 4 | 13 | 2.17 | 2.83 | (17 - 13) 14 |
| 7 | 22 | 4 | 18 | 2.57 | 3.14 | (22 - 17) 5 |
