Answer:
Average Fixed Cost = FC/Q
Average Variable Cost = VC/Q
Average Total Cost = TC/Q
Marginal Cost = ΔTC/ΔQ
Explanation:
Fixed Cost (FC):
This cost is fixed and doesn't change with quantity of output.
Variable Cost (VC):
This cost is variable and it changes as the quantity of output is changed.
Average Fixed Cost (AFC):
AFC = FC/Q
Where FC is the fixed cost and Q is the quantity of units produced
Average Variable Cost (AVC):
AVC = VC/Q
Where VC is the variable cost and Q is the quantity of units produced
Average Total Cost (ATC):
Average cost is the total average cost per unit of output produced.
ATC = TC/Q
Where TC is the total cost and Q is the quantity of units produced
or
ATC = AFC + AVC
Marginal cost (MC):
MC = ΔTC/ΔQ
Marginal cost is the additional cost of producing one additional unit.
The cost function is
Taking the derivative of cost function with respect to q will yield Marginal cost
The Average Fixed cost is
The Average Variable cost is
The Average cost is