A firm's average fixed cost is ₹ 20 when it produces 6 units. What will its average fixed cost be at 4 units of output?

1. AFC = TFC / Q, so first recover TFC: TFC = AFC × Q = 20 × 6 = ₹ 120. 2. TFC is constant at ₹ 120 across all output levels. 3. AFC at 4 units = 120 / 4 = ₹ 30. 4. ₹ 20 (B) assumes AFC is unchanged, but AFC rises as output falls; ₹ 40 (C) and ₹ 60 (D) use the wrong quantity. Hence ₹ 30. _Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 3 Unit II "Theory of Cost", p.21–22_