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Question:

When the total fixed cost of producing 100 units is Rs. 30 and the average variable cost Rs. 3, total cost is equal to _________.

Rs.30

Rs.270

Rs.3

Rs.330

Solution:

TC = TVC + TFC
TVC= AVC * q
= Rs. 3 * 100 units
= Rs. 300
Therefore, TC= Rs. 30 + 300
TC= Rs. 330