Question

Fill in the blanks in the following table:

output	total cost	total fixed cost	total variable cost	average fixed cost	average variable cost	average total cost	marginal cost
100	4500	3500	1000	35	10	45
200					9		8
300							9.50
400	7300			8.75
500			4890			16.78
600			6000		10
700				5			12.50
800	12150					15.19

A) complete the table

B) do your numbers in the table illustrate the expected relation between average variable cost and marginal cost? between average total cost and marginal cost?

Answer 1

A.

TC=TVC+TFC

ATC=TC/Q

AVC=TVC/Q

AFC=TFC/Q

MC=TCn-TCn-1

B.

Yes, the expected relation between average variable cost and marginal cost are there because MC is cutting AVC at its minimum point approximately.

Yes, the expected relation between average Total cost and marginal cost are there because MC is cutting ATC at its minimum point approximately.