Question

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.

Answer 1

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.