Question: (a) Based on the below diagram, explain the short-run average fixed cost (SAFC), short-run average variable cost (SAVC) and short-run average total cost (SATC) curves

(a) Based on the below diagram, explain the short-run average fixed cost (SAFC), short-run average variable cost (SAVC) and short-run average total cost (SATC) curves at the different stages. [8 marks] Cost SATC Stage I Stage II Stage III SAVC SAFC > Output b) Suppose a firm's short-run total costs are given by, TC (y) = 5y2 + y + 100. (i) Calculate the value of variable cost, TVC (y) and fixed cost, TFC (y). [2 marks] (ii) Find the value of short-run average cost, SAC (y). [1 mark]

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