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.

Homework Answers

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.

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