Unit of T.F.C T.V.C T.C A.F.C A.V.C A.C M.

C
Output (Q) (Total fixed (total variable (total (Average (Average (Average (Marginal
X cost) cost) cost) fixed cost) variable cost) cost) cost)
0 30 0 30
2 30 32 62 15 16 31 32
4 30 54 84 7.5 13.5 21 22
6 30 66 96 5 11 16 12
8 30 72 102 3.75 9 12.75 6
10 30 105 135 3.0 10.5 13.5 33
12 30 144 174 2.5 12 14.5 39
14 30 196 226 2.14 14 16.14 52
16 30 248 278 1.88 15.5 17.38 52
300 T.F.C
T.V.C
250 T.C
Explanation
The graph shows the changes in total costs with a
200 uniformly increasing output (Q).The T.F.C remains
C constant while the T.V.C increases 32( at 2 unit) to
o 150 72 (at 8 units) which shows that T.V.C increases
s with a decreasing trend. However, from 105 (at 10
t units) to 248 (at 16 units) shows that the T.V.C is
100
increasing in an accelerated rate.
Since the T.F.C is constant, the T.C which is the
50 sum of T.F.C and T.V.C also varies in the same
manner as the T.V.C , i.e, increasing at a
decreasing trend 30 (at 0 units) to 102 (at 8 units)
0
and then at an accelerated rate from 135 (at 10
0 2 4 6 8 10 12 14 16
units) to 278(at 16 units).
Unit of output (Q) X

A.F.C
60
A.V.C
A.C
50 M.C

Explanation
40 The graph shows changes in the average costs
C and the marginal cost with a uniformly increasing
o output (Q).
30
s The A.F.C has a sharp decline from 15 (at 2 units)
t to 5(at 6 units) but then decreases at a slower
20 rate to 1.88 (at 16 units).
From 2 to 8 units the trend is decreasing for all
other average and marginal costs; A.V.C: 16-9,
10 A.C: 31-12.75 and M.C: 32-6. However, from 10
to 16 units all three costs have an increasin trend;
A.V.C:10.5-15.5, A.C: 13.5-17.38 and M.C: 33-52
0 (it becomes constant at 52 from 14 to 16 units).
0 2 4 6 8 10 12 14 16
Unit of output (Q) X