Question

# 3. Cost Tables (a) Fill in the following table, where TFC = Total Fixed Cost, TVC...

3. Cost Tables

(a) Fill in the following table, where TFC = Total Fixed Cost, TVC = Total Variable Cost, TC = Total Cost, AFC = Average Fixed Cost, AVC = Average Variable Cost, ATC = Average Total Cost, and MC = Marginal Cost. Remember the following relationships:

TFC + TV C = TC
AF C = T F C/Q, AV C = T V C/Q, AT C = T C/Q

MC = ∆TC ∆Q

 Output (Q) TFC TVC TC AFC AVC ATC MC 0 500 0 500 - - - - 1 500 200 2 800 3 850 4 950 5 120 6 800

(b) Graph AFC, AVC, ATC and MC on the same axis. Be accurate.

A.

 Quantity TFC TVC TC AFC AVC ATC MC 0 500 0 500 1 500 200 700 500 200 700 200 2 500 300 800 250 150 400 100 3 500 350 850 166.6666667 116.6666667 283.3333333 50 4 500 450 950 125 112.5 237.5 100 5 500 600 1100 100 120 220 150 6 500 800 1300 83.33333333 133.3333333 216.6666667 200

FORMULAS:

TFC + TV C = TC
AF C = T F C/Q

AV C = T V C/Q

AT C = T C/Q

MC = ∆TC ∆Q

B.

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