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Solution Library
Calculate the Maximum and Minimum Output for Average Variable Cost
Question
Precision Engineering department has collected data on its average costs of production for the past 12 months. The monthly fixed cost is $4000 per month. The AVC and associated output data are presented below:
| Month | Q | AVC $ |
| Jan | 70 | 375 |
| Feb | 58 | 540 |
| Mar | 160 | 450 |
| Apr | 120 | 255 |
| May | 130 | 138 |
| Jun | 120 | 150 |
| Jul | 10 | 450 |
| Aug | 35 | 350 |
| Sep | 80 | 60 |
| Oct | 110 | 70 |
| Nov | 100 | 90 |
| Dec | 190 | 153 |
Show the level of output at which AVC reach its minimum value, and the minimum value of AVC at its minimum.
Summary
The question belongs to Statistics and it is about calculating the maximum output at maximum AVC and minimum output at minimum AVC.
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