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Can someone explain why? I do not particularly understand. The average variable cost is $5, and I need the variable cost to calculate the fixed cost


1 Answer 1


If $C(Q) = C_v(Q) + F$ is the cost function where $C_v(Q)$ is the variable cost and $F$ is the fixed cost, then

  1. $AC(Q) = \frac{C_v(Q) + F}{Q}$
  2. $AVC(Q) = \frac{C_v(Q)}{Q}$

You're given $AC(Q) = 11$, $AVC(Q) = 5$ and $Q = 100$. Can you plug in the values in the above definitions and continue?

Click on the spoiler for verification:

$F = \\\$600$

  • 1
    $\begingroup$ Wow, didn't know about this spoiler tool! $\endgroup$
    – VARulle
    Nov 2, 2022 at 11:53
  • $\begingroup$ @VARulle It exists but I am sure the temptation to reveal the spoiler makes it useless anyways haha. I have mostly seen it being used by the puzzlers. $\endgroup$
    – Rick_Morty
    Nov 3, 2022 at 5:33

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