Question

In: Economics

Output TC MC ATC AFC TVC AVC TFC 0 1 2 3 4 5 6 7...

Output

TC

MC

ATC

AFC

TVC

AVC

TFC

0

1

2

3

4

5

6

7

8
  1. AFC for 8 units of output is $4.5
  2. AVC for 4 units of output is $15
  3. TC is increased by $14 when the 5th unit of output is added
  4. The ATC of 6 units of output is the same as the ATC of 5 units of output
  5. TC for 7 units of output is $168
  6. TVC is increased by $64 when the 8th unit of output is added
  7. AFC + AVC for 2 units of output is $40
  8. ATC is decreased $10 when output is increased from 2 to 3 units
  9. It costs $25 more to produce 1 unit of output than to produce 0 (zero) output

Solutions

Expert Solution

Output TC MC ATC AFC TVC AVC TFC
0 36 0 36
1 61 25 61 36.0 25 25.0 36
2 80 19 40 18.0 44 22.0 36
3 90 10 30 12.0 54 18.0 36
4 96 6 24 9.0 60 15.0 36
5 110 14 22 7.2 74 14.8 36
6 132 22 22 6.0 96 16.0 36
7 168 36 24 5.1 132 18.9 36
8 232 64 29 4.5 196 24.5 36
AFC for 8 units of output is $4.5, AFC=FC/Q or FC=AFC*Q so FC = 4.5*8 36
AVC for 4 units of output is $15, AFC=VC/Q or VC=AVC*Q so VC = 15*4=60 at Q=4
TC is increased by $14 when the 5th unit of output is added, this means MC at Q=5 is 14
The ATC of 6 units of output is the same as the ATC of 5 units of output
C for 7 units of output is $168
TVC is increased by $64 when the 8th unit of output is added means MC for Q=8 is 64
AFC + AVC for 2 units of output is $40, means ATC=40, ATC=AVC+AFC, ATC=TC/Q, so TC = 40*2=80
ATC is decreased $10 when output is increased from 2 to 3 units, that means ATC at Q=3 will be 30, TC=30*3
Formulas Used = ATC=TC/Q or TC=ATC*Q
MC= Change in TC/Change in Q
ATC=AVC+AFC, TC = TFC+TVC ot TVC=TC-TFC

Rahul Sunny answered 1 year ago
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