Question

Consider a firm that has a fixed cost of $60 a minute.

output=1, Variable Cost= $10 what is the fixed cost?, Total Cost? Marginal cost?, AFC?, AVC? and ATC?

Output is 2?

Can't quite figue it out... thanks

Answer 1

I am confused by "$60 a minute". Could you mean fixed cost is simply $60.
Let me assume just that. Fixed cost=$60.

So, when output=1, then
total cost = 10+60=70,
marginal cost = 10,
AFC=60/1=60
AVC=10/1=10
ATC=70/1=70

When output=2, (assuming MC=10) then
Total cost = 20+60=80
MC = 10
AFC = 60/2 = 30
AVC = 20/2 = 10
ATC = 80/2 = 40