a. How do you find the fixed cost, FC, from the information in the graph?

Draw a line
indication the fixed cost at different quantities produced.

Cost Function
250
229
200

150 Total Cost

130
Cost

100 Fixed Cost

80
50 60
30 40
0
0 20 40 60 80 100 120
Quantity

b. How do you find the variable cost, VC? Draw it.

Total Cost (TC) Fixed Cost (FC) Variable Cost (VC)

30 30 0
40 30 10
60 30 30
80 30 50
130 30 100
229 30 199

Cost Function
250 229

200 199

150 130 Total Cost

Fixed Cost
Cost

100 80 100 Variable Cost

60
50 40 50
30 30
10
0 1
0 20 40 60 80 100 120
Quantity