Question

Complete the following table. Output MC VC FC TC ATC AFC AVC ATC-AVC 0 \$6,000 100...

Complete the following table.

 Output MC VC FC TC ATC AFC AVC ATC-AVC 0 \$6,000 100 \$10 200 \$2,500 300 \$10,500 400 \$36.25 500 \$45 600 \$20,000

You know several relationships among these variables that will allow you to check your work. For example,

AFC decreases as Q increases.

AVC approaches ATC from below as output increases.

MC = Change in TC/ change in Q

Variable cost = TC - FC

FC = TC when Q=0

ATC = TC/Q

AVC = VC/Q

AFC = FC/Q

Now, by applying all the formulae , we get the following table:

 Q MC VC FC TC ATC AFC AVC ATC-AVC 0 - 0 6000 6000 - - - - 100 10 1000 6000 7000 70 60 10 60 200 15 2500 6000 8500 42.5 30 12.5 30 300 20 4500 6000 10500 35 20 15 20 400 40 8500 6000 14500 36.25 15 21.25 15 500 45 13000 6000 19000 38 12 26 12 600 70 20000 6000 26000 43.33 10 33.33 10

We can see from the table as Q increases AFC decreases.

AS Q increases (ATC-AVC) decreases.

As Q increases TC increases.

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