Question

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.

Answer 1

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.