A firm is producing 20 units. At this level of output ,the ATC and AVC are respectively equal to Rs.40 and Rs.37. Find out the total fixed cost of the firm.

We know, Total Fixed Cost is equal to Average Fixed Cost multiplied by the units of output produced.

or, TFC = AFC x Units of Output

Also, ATC = AFC + AVC

So, in order to find Average Fixed Cost,

AFC = ATC - AVC = 40 - 37 = 3

Thus, TFC = 3 x 20 = 60

The total fixed cost of the firm is 60.

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