Question

In: Economics

a) From the above table, what is the average total cost of producing 13 units? Show your steps.

Output (units per day)

Total fixed cost (dollars)

Total variable cost (dollars)

Total cost (dollars)

0

20

0

20

4

20

25

45

9

20

50

70

13

20

75

95

16

20

100

120

18

20

125

125

  1. a) From the above table, what is the average total cost of producing 13 units? Show your steps.

  2. b) From the above table, calculate the average total variable cost of producing 9 units of output. Show your steps.

  3. c) Using the data in the above table, when output increases from 9 to 13 units, Calculate the marginal cost of one of those 4 units. Show your steps

Solutions

Expert Solution

a) Average total cost = Total Cost / Output

Total cost of producing 13 units = 95

Average total cost = 95 / 13 = 7.3

b) Average total variable cost = Total Variable Cost / Output

Total variable cost of producing 9 units = 50

Average total variable cost = 50 / 9 = 5.55

c) When output rises from 9 to 13, total cost rises from 70 to 95 where marginal cost is 95 - 70 = 25


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