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C A foundation economcics Paper4 Part I Questions for practice
QUESTION
Q4) The average fixed cost of 2 units of output is
Output Total Cost
0 240
1 330
2 410
3 480
4 540
5 610
6 690

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Correct

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Solution:
Using the information provided in the table, we can calculate the fixed cost as follows:
Fixed cost at 0 units of output: ₹240
Fixed cost at 1 unit of output: ₹330 - ₹240 = ₹90

Fixed cost at 2 units of output: ₹410 - ₹330 = ₹80
Fixed cost at 3 units of output: ₹480 - ₹410 = ₹70
Fixed cost at 4 units of output: ₹540 - ₹480 = ₹60
Fixed cost at 5 units of output: ₹610 - ₹540 = ₹70
Fixed cost at 6 units of output: ₹690 - ₹610 = ₹80
Therefore, the average fixed cost of producing 2 units of output is:
Average fixed cost = Fixed cost at 2 units of output / 2 units
= ₹80 / 2
= ₹40
So the average fixed cost of producing 2 units of output is ₹40. Answer given in module is option (c)
Correct option is (c)