Question

# How do I calculate AVC (Average Variable Cost)? TABLE FOR COMPUTATION OF PROBLEM 23-4 Total Output...

How do I calculate AVC (Average Variable Cost)?

 TABLE FOR COMPUTATION OF PROBLEM 23-4 Total Output and Sales Total Costs Market Price Total Revenues Total Profit Average Total Cost (ATC) Average Variable Cost (AVC) Marginal Cost (MC) Marginal Revenue (MR) 0 5 10 0 -5 0 0 -- -- 1 9 10 10 1 9 4 4 10 2 11 10 20 9 5.5 3 2 10 3 12 10 30 18 4 1 10 4 14 10 40 26 3.5 2 10 5 18 10 50 32 3.6 4 10 6 24 10 60 36 4 6 10 7 32 10 70 38 4.57 8 10 8 42 10 80 38 5.25 10 10 9 54 10 90 36 6 12 10 10 68 10 100 30 6.8 14 10

Variable costs are 0 when output is 0
at this point TC=FC
So we know fixed costs are 5
Deduct 5 from TC at each output level to get VC
Now AVC=VC/Output

 Total Output and Sales Total Costs Market Price Total Revenues Total Profit VC=TC-5 Average Total Cost (ATC) Average Variable Cost (AVC) Marginal Cost (MC) Marginal Revenue (MR) 0 5 10 0 -5 0 0 -- -- -- 1 9 10 10 1 4 9 4 4 10 2 11 10 20 9 6 5.5 3 2 10 3 12 10 30 18 7 4 2.33333 1 10 4 14 10 40 26 9 3.5 2.25 2 10 5 18 10 50 32 13 3.6 2.6 4 10 6 24 10 60 36 19 4 3.16667 6 10 7 32 10 70 38 27 4.57 3.85714 8 10 8 42 10 80 38 37 5.25 4.625 10 10 9 54 10 90 36 49 6 5.44444 12 10 10 68 10 100 30 63 6.8 6.3 14 10

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