1. Suppose you are given the equation:
Total Cost = 500 + 35*Quantity
a. What are the fixed costs? What are the variable costs? What is a marginal cost? [Hint: for the marginal cost, consider making a small table and determine the marginal cost for different values for Quantity.]
b. Derive the values for Average Fixed Cost, Average Variable Cost, and Average Total Cost.
c. What is an average total cost when output is 50?
d. Accurately graph on graph paper: Marginal Cost, Average Fixed Cost, Average Variable Cost, and Average Total Cost.
1. Suppose you are given the equation:
Total Cost = 500 + 35*Quantity
a. What are the fixed costs? What are the variable costs? What is a marginal cost? [Hint: for the marginal cost, consider making a small table and determine the marginal cost for different values for Quantity.]
b. Derive the values for Average Fixed Cost, Average Variable Cost, and Average Total Cost.
c. What is an average total cost when output is 50?
d. Accurately graph on graph paper: Marginal Cost, Average Fixed Cost, Average Variable Cost, and Average Total Cost.
Related textbook solutions
Related questions
A firm's fixed costs for 0 units of output and its average total cost of producing different output levels are summarized in the table below. Complete the table to find the fixed cost, variable cost, total cost, average fixed cost, the average variable cost, and marginal cost at all relevant levels of output.
Instruction: Round your answers for Average Fixed Cost (AFC) and Average Variable Cost (AVC) to 2 decimal places.
|
Q |
FC |
VC |
TC |
AFC |
AVC |
ATC |
MC |
|
0 |
$15,000 |
- |
- |
- |
- |
||
|
100 |
300 |
||||||
|
200 |
200 |
||||||
|
300 |
175 |
||||||
|
400 |
225 |
||||||
|
500 |
325 |
||||||
|
600 |
400 |
