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Homework answers / question archive / Complete the following table using the information provided
Complete the following table using the information provided. Total Fixed cost Average Variable cost Average Total cost Product (RM) fixed cost (RM) variable cost (RM) (Units) (RM) (RM) Marginal cost (RM) 0 1 72 2 72 60 3 72 4 84 b) Is the firm operating in the short run or long run? Support your answer.
Solution:- a.
| Q(TP) | FC(AFC×Q) | AFC | VC(AVC×Q) | AVC | TC(FC+VC) | MC |
| 0 | 144 | — | 0 | — | 144 | — |
| 1 | 144 | 144 | 72 | 72 | 216 | 72 |
| 2 | 144 | 72 | 120 | 60 | 264 | 48 |
| 3 | 144 | 48 | 216 | 72 | 360 | 96 |
| 4 | 144 | 36 | 336 | 84 | 480 | 120 |
Explanation:- a
b. As the firm incurs both fixed costs and variable costs in the production process, it means the firm is still operating under the short run. In the long run a firm incurs only variable costs in the production.
