Columns 4 through 6 in Table 7-2 show the firm’s total costs. TFC is
simply $10 per unit of capital times 10 units of capital. TVC is $20 per unit
of labour times the increasing amount of labour shown in column 2.
the sum of TFC and TVC. Columns 7 through 9 show the average costs.
For each average cost concept, the number is computed as the total cost
from columns 4, 5, or 6 divided by the number of units of output shown
in column 3.
Column 10 shows the marginal cost. For each change in the level of
output, MC is equal to the change in TC divided by the change in output.
For example, as output increases from 22 to 35 units (which occurs when