Question

Calculate MC and TC from the following cost schedule of a firm whose total fixed costs are ₹ 15. 

Output (Units)	1	2	3	4
TVC (₹)	10	19	29	40

Answer 1

Given:

• Total Fixed Cost (TFC) = ₹15
• Total Variable Cost (TVC) is provided for each output level.

Step 1: Calculate Total Cost (TC)

Formula: TC = TFC + TVC

Output (Units)	TVC (₹)	TC (₹) = TVC + 15
1	10	10 + 15 = 25
2	19	19 + 15 = 34
3	29	29 + 15 = 44
4	40	40 + 15 = 55

Step 2: Calculate Marginal Cost (MC)

MC = Change in TC / Change in Output

Output (Units)	TC (₹)	MC (₹)
1	25	–
2	34	34 − 25 = 9
3	44	44 − 34 = 10
4	55	55 − 44 = 11

The MC for the 1st unit is simply the change from 0 output to 1 unit:

MC (1st unit) = TC(1) − TC(0) = 25 − 15 = ₹ 10