IndigoLearn

Economics

Explain this

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Prasanth kumar Kamisetty

Prasanth kumar Kamisetty

CA Foundation

11K+

22-Sep-20 10:15

4

Answers (1)

Assume total cost includes rent ( fixed cost) + some variable cost - When ouput is zero - rent is incurred - when output increases to 4 the additional cost of 4 is incurred i.e variable cost per unit vairable cost is 1. So when output is 4, fixed cost of 20 needs to be divided by 4 to get average fixed cost


Sriram Somayajula

Sriram Somayajula

Admin

22-Sep-20 12:02