Question

In: Economics

(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes. Assume that fixed costs are...

(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes. Assume that fixed costs are $10. What is the marginal cost of the fourth cake?

$35

$10

$8

$25

The total cost curve shows how _____ cost depends on the quantity of _____.

	total; fixed inputs
	marginal; output
	average; variable inputs
	total; output

Average variable cost is:

	the difference between average total cost and total variable cost.
	total variable cost divided by output.
	variable cost per unit multiplied by output.
	the difference between total cost and total variable cost.

Expert Solution

Q1 is incomplete as the table is not given

Q2. Total Cost curve shows the relationship between the total cost and the quantity of output.

It is plotted on a graph with quantity shown on the x-axis and the total cost on the y-axis

Ans: total; output

Q3. The average variable cost can be calculated using any of the below-mentioned formulae:

Average variable cost = Total Variable Cost/Output

Average variable cost = Average total cost - Average fixed cost

Ans: total variable cost divided by output.

Rahul Sunny answered 3 years ago

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