Question

Calculate TVC and TC from the following cost schedule of a firm, given the fixed cost of 10.

Outputs (Units)	1	2	3	4
Marginal cost (₹)	6	5	4	6

Answer 1

Given:

• Fixed Cost (TFC) = ₹ 10
• Marginal Cost (MC) for each output level is given.

Step 1: Calculate TVC (Total Variable Cost)

TVC is calculated by adding up marginal costs (MC).

Output (Units)	MC (₹)	TVC (₹)
1	6	6
2	5	6 + 5 = 11
3	4	11 + 4 = 15
4	6	15 + 6 = 21

Step 2: Calculate TC (Total Cost)

TC = TFC + TVC

Output (Units)	TVC (₹)	TC = 10 + TVC (₹)
1	6	16
2	11	21
3	15	25
4	21	31

TVC = ₹ 6, ₹ 11, ₹ 15, ₹ 21

TC = ₹ 16, ₹ 21, ₹ 25, ₹ 31