Question

At zero output total cost is $50, at 1 unit total cost is $70, at 2 units TC is $85, at 3 units TC=$95, 4 units TC = $120, 5 units TC=$160, 6 units tc=$240.

A. How much are fixed costs?

B. With which unit does diminishing returns begin?

C. How much are average total costs at 5 units?

D. How much are average fixed costs at 5 units?

E. What is the marginal cost of the 6th unit?

F. How much are average variable costs at 4 units?

Answer 1

OUTPUT	TC	TFC	TVC	ATC	AFC	AVC	MC
0	50	50	0	0	0	0
							20
1	70	50	20	70	50	20
							15
2	85	50	35	42.5	25	17.5
							10
3	95	50	45	31.67	16.67	15
							25
4	120	50	70	30	12.5	17.5
							40
5	160	50	110	32	10	22
							80
6	240	50	190	40	8.33	31.67
Req A: Fixed cost is $50
Req B: Diminishing return begings from Production of 4th unit (ass MC began to rise)
Req C: Average total cost for 5 units is $32 per unit
Req D:Average fixed cost fr 5 units is $10 per unit
Req E: Marginal cost for 6th unit is $80
Req F: Average variable cost at 4 units is $17.50