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Help me solve this economics problem
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27-09-2013 6:42pm#1A firm can produce and output of 100 for a total cost (TC) of £1100. It can also produce an output of 140 for a total cost (TC) of £1340. What are the fixed costs (FC)? Note that TC = FC + variable costs, where variable costs are determined by output Q, so that TC = FC + bQ
I'm completely stumped.
0
Comments
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A firm can produce and output of 100 for a total cost (TC) of £1100. It can also produce an output of 140 for a total cost (TC) of £1340. What are the fixed costs (FC)? Note that TC = FC + variable costs, where variable costs are determined by output Q, so that TC = FC + bQ
I'm completely stumped.
Simultaneous equation0 -
A firm can produce and output of 100 for a total cost (TC) of £1100. It can also produce an output of 140 for a total cost (TC) of £1340. What are the fixed costs (FC)? Note that TC = FC + variable costs, where variable costs are determined by output Q, so that TC = FC + bQ
I'm completely stumped.
1100 = fc + b.100
1340 = fc + b.140
Fc = 1100 - b.100
1340 = (1100- b.100) + b.140
240= b40
B=240/40
B=6
Does this look right?
So then
Fc = 1100 - b100
= 5000
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