This is related to this question: elisp functions as parameters and as return value
(defun avg-damp (n)
'(lambda(x) (/ n 2.0)))
Either
(funcall (avg-damp 6) 10)
or
((avg-damp 6) 10)
They gave errors of Symbol's value as variable is void: n
and eval: Invalid function: (avg-damp 6)
respectively.