The figure given below shows the average fixed cost (AFC)and the average variable cost (AVC)curves of a competive firm. Figure 21.1 Refer to Figure 21.1.Compute the total cost of producing 4 units of the output.

Question

The figure given below shows the average fixed cost (AFC)and the average variable cost (AVC)curves of a competive firm. Figure 21.1  Refer to Figure 21.1.Compute the total cost of producing 4 units of the output.

Quizplus · Accepted Answer

To calculate the total cost of producing 4 units, we need to add the total fixed cost (TFC) to the total variable cost (TVC). 
From the graph, we can see that:
- AFC = TFC/Q = $16/Q
- AVC = TVC/Q = $10 + $2Q/Q = $10
Therefore, TVC for producing 4 units = AVC x Q = $10 x 4 = $40
And TFC for the given firm is $40, as shown by the point where the AFC curve intersects the vertical axis.
Thus, total cost (TC) for producing 4 units = TFC + TVC = $40 + $40 = $80. Hence, the correct answer is C.

The Figure Given Below Shows the Average Fixed Cost (AFC)and