Question
In: Economics
a) Use the data in the table and calculate the average costs and the marginal cost...
a) Use the data in the table and calculate the average costs and the marginal cost
|
Output(units) |
Total cost |
AFC |
AVC |
ATC |
MC |
|
0 |
$400 |
||||
|
10 |
540 |
||||
|
20 |
620 |
||||
|
30 |
810 |
||||
|
40 |
910 |
b) Discuss the relationship between ATC and MC. Also draw a graph showing both curves.
Solutions
Expert Solution
The formula's to calculate AFC, AVC, ATC, MC are as follows:
TCn - TC
n-1
TFC = $400 (becuase at output = 0 all costs are fixed costs and variable cost = 0 )
at 0 output fixed cost is not defined.
| Output | Total cost | AFC | AVC | ATC | MC |
| 0 | 400 | not defined | not defined | not defined | not defined |
| 10 | 540 | 400/10 =40 | 140/10= 14 | 540/10= 54 | 540-400=140 |
| 20 | 620 | 400/20 = 20 | 220/20= 11 | 620/20= 31 | 620-540= 80 |
| 30 | 810 | 400/30 = 13.33 | 410/30= 13.66 | 810/30= 27 | 810-620= 190 |
| 40 | 910 | 400/4= 10 | 510/40= 12.75 | 910/40= 22.75 | 910- 810= 100 |
B) As quantity increases, ATC will decrease and MC will initially decrease and then increase. Eventually they intersect, then MC continues to increase and pulls ATC up after it. A firm's marginal cost curve also acts as its supply curve. I have shown all the average cost curves along with their intersectionality in one daigram. this will help you develop better analysis of the topic.
Dear Student/ Learner, it was my great pleasure to help you
solving this problem. I wish you best luck for your learning
endeavour.
Happy Learning
Rahul Sunny answered 4 months agoRelated Solutions
Use the data in the table and calculate the average costs and marginal cost. Output (units)...
Use the data in the table and calculate the average
costs and marginal
cost.
Output (units)
Total cost($)
AFC
AVC
ATC
MC
0
40
10
54
20
62
30
80
40
84
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Quantity Total Revenue Marginal Revenue Total Cost Marginal Cost Fixed Costs ATC Average Fixed Costs Average...
Quantity
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Fixed Costs
ATC
Average Fixed Costs
Average Variable Costs
0
0
-
10
-
10
-
-
-
1
8
24
14
24
2
16
34
10
17
3
24
42
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14
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1b. At a price of $14, what is...
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Variable
TotalQuantity
Cost
Cost 0
cups
Rs.0
Rs.29
1
9
39
2
24
54
3
44
74
4
69
99
5
99
129
6
134
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Use your knowledge of cost functions to calculate the missed cost data in the accompanying table....
Use your knowledge of cost functions to calculate the missed
cost data in the accompanying table.
Round your answers to two digits after the decimal.
Quantity
Marginal cost
Fixed cost
Variable cost
Total cost
Average fixed cost
Average variable cost
Average total cost
0
---
---
---
---
1
$50.00$50.00
2
$74.00$74.00
3
$105.00$105.00
4
$40.00$40.00
$400.00$400.00
What is the total cost when producing zero units?
total cost: $
What is the marginal cost for the first unit?
marginal cost:...
Use your knowledge of cost functions to calculate the missed cost data in the accompanying table....
Use your knowledge of cost functions to calculate the missed
cost data in the accompanying table.
Round your answers to two digits after the decimal.
Quantity
Marginal cost
Fixed cost
Variable cost
Total cost
Average fixed cost
Average variable cost
Average total cost
0
---
---
---
---
1
$50.00$50.00
2
$72.00$72.00
3
$105.00$105.00
4
$30.00$30.00
$380.00$380.00
What is the total cost when producing zero units?
total cost: $
What is the marginal cost for the first unit?
marginal cost:...
Use your knowledge of cost functions to calculate the missed cost data in the accompanying table....
Use your knowledge of cost functions to calculate the missed
cost data in the accompanying table.
Round your answers to two digits after the
decimal.
Quantity
Marginal cost
Fixed cost
Variable cost
Total cost
Average fixed cost
Average variable cost
Average total cost
0
---
---
---
---
1
$45.00
2
$64.00
3
$85.00
4
$20.00
$400.00
What is the total cost when producing zero units?
total cost: $
What is the marginal cost for the first unit?
marginal cost:...
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