A blank cell in a cost table can almost always be recovered from its neighbours. Find a column that links to it, calculate, then check that the table agrees with itself.
This lesson is part of cost and productivity from a supplied table. Begin with separating total, average and marginal figures if those terms are shaky.
Which route recovers the missing value?
Look at what the question gives you beside the gap.
| If you are given | Route to the missing total cost |
|---|---|
| Marginal cost of that row | Previous TC + MC |
| Average cost of that row | AC × Q |
| Marginal cost of the next row and next TC | Next TC − next MC |
Pick the route that uses the fewest steps, then confirm with another if one is available.
Worked example: a fictional laundry
Fixed cost is RM100, so TC at zero output is RM100.
| Q | TC (RM) | MC (RM) | AC (RM) |
|---|---|---|---|
| 0 | 100 | none | none |
| 1 | 130 | 30 | 130 |
| 2 | 154 | 24 | 77 |
| 3 | missing | 18 | missing |
| 4 | 196 | 24 | 49 |
| 5 | missing | missing | 45 |
Missing TC at Q = 3. Use the marginal cost: 154 + 18 = RM172. Confirm with the next row: MC at Q = 4 is 196 − 172 = 24, which matches the table.
Missing TC at Q = 5. Use the average cost: 45 × 5 = RM225. Then MC at Q = 5 is 225 − 196 = RM29.
With TC at Q = 3 known, AC at Q = 3 is 172 ÷ 3 = RM57.33 (to two decimal places).
How do I check the table is consistent?
Run three quick tests after filling the gap.
- Does each MC equal the difference of its neighbouring totals?
- Does AC equal TC ÷ Q in every row?
- Does AC fall while MC is below it and rise when MC is above it?
For the laundry, AC falls 77, 57.33, 49, 45. Each MC (18, 24, 29) is below the AC before it, so AC is falling, which is consistent.
The mistake that costs marks
The common slip is to fill the gap with a figure that “looks about right” between the neighbours, such as RM175 for Q = 3. It feels safe but is unsupported.
The table gives you the exact route. A made-up figure also breaks the consistency test, because the MC at Q = 4 would become 196 − 175 = 21, not 24.
Check yourself
A fictional studio has TC of RM80 at Q = 0, RM110 at Q = 1 and RM130 at Q = 2. The average cost at Q = 3 is RM48. The marginal cost of the fourth unit is RM22. Find TC at Q = 3, TC at Q = 4 and AC at Q = 4.
Answer
TC at Q = 3 uses the average cost: 48 × 3 = RM144.
TC at Q = 4 uses the marginal cost: 144 + 22 = RM166.
AC at Q = 4 = 166 ÷ 4 = RM41.50.
Consistency check: MC at Q = 3 is 144 − 130 = 14, and MC at Q = 4 is 22. Both are below the earlier average costs (65 at Q = 2 and 48 at Q = 3), so AC falls from 65 to 48 to 41.50, as it should.
What to study next
Continue with explaining why output growth need not imply higher productivity. Then use the integrated practice to mix all four skills.
If you want a teacher to test your consistency checks, see online one-to-one Economics tuition.