Final answer:
The Average Fixed Cost (AFC) is calculated by dividing the total fixed costs by the quantity of goods produced, which for the given total cost (TC) function TC=4Q+3Q+2Q+150 is AFC=150/Q.
Step-by-step explanation:
The student's question is regarding the Average Fixed Cost (AFC) derived from a total cost function for a firm's production. Given the total cost (TC) function TC=4Q+3Q+2Q+150, we first need to recognize that the fixed costs (FC) are the costs that do not vary with the quantity of output produced and in this function is represented by the constant 150. To calculate the AFC, we divide the total fixed costs by the quantity (Q) of goods produced.
AFC = FC / Q
Here, since the fixed cost is 150, the AFC equation becomes:
AFC = 150 / Q
This formula will give us the average fixed cost for any level of output Q. It is important to note that AFC will decrease as Q increases, because the fixed cost is being spread over a larger number of units.