Question

The table below shows the cost data of a furniture manufacturer named Cindy’s Custom Made. a) Complete the table, assuming that labour and materials cost $12 an hour. For all amounts, round your answers to the nearest whole number.

Output of Chairs	Total Hours	Average Hours per Chair	Marginal Hours per Chair	TVC($)	AVC($)	TFC($)	TC($)	ATC($)	MC($)
1	4	Answer	Answer	Answer	Answer	180	Answer	Answer	Answer
2	6	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
3	12	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
4	20	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
5	30	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
6	48	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer

What is the most productive output? Whole numbers

    Most productive output: Answer chairs.

c) What are AVC and ATC at this quantity? Whole numbers

    AVC: $ Answer

    ATC: $ Answer

d) What is the output at economic capacity? Whole numbers

    Economic capacity: ___  chairs.

Answer 1

Answer:

Output of chair	Total hours	Average hour per chair	Marginal hour per chair	TVC=12*Total hours	AVC=TVC/Output	TFC	TC=TVC+TFC	ATC=TC/Output	MC=TCn-TCn-1
1	4	4/1=4	-	48	48	180	228	228	-
2	6	6/2=3	6-4=2	72	36	180	252	126	24
3	12	12/3=4	12-6=6	144	48	180	324	108	72
4	20	20/4=5	20-12=8	240	60	180	420	105	96
5	30	30/5=6	30-20=10	360	72	180	540	108	120
6	48	48/6=8	48-30=18	576	96	180	756	126	216

Most productive output is 2 chairs.(At this output Marginal hour per chair is minimum)

c) AVC at this point is $36.

ATC at this point is $126.

d) Output at economic capacity is 4 chairs. (At this output ATC is minimum).