Question

3. The total costs for Guidos Pizza are summarized in the following table. Complete the table. Show how you obtain each category of cost.

Q	FC	VC	TC	AFC	AVC	ATC	MC
0			4,000
10			8,000
20			10,000
30			16,000
40			24,000
50			40,000
60			60,000

Answer 1

Q	FC	VC	TC	AFC	AVC	ATC	MC
0	4000	0	4,000
10	4000	4,000	8,000	400	400	800	400
20	4000	6,000	10,000	200	300	500	200
30	4000	12,000	16,000	133.33	400	533.33	600
40	4000	20,000	24,000	100	500	600	800
50	4000	36,000	40,000	80	720	800	1600
60	4000	56,000	60,000	66.67	933.33	1000	2000

FC is same at all output leve and equal to total cost at the zero output level

so FC=$4000

VC=TC-FC

VC(10)=8000-4000=4000

AFC=FC/Q

AFC(10)=4000/10=400

AVC=VC/Q=4000/10=400

ATC=TC/Q=8000/10=800

MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p

MC(10)=(8000-4000)/(10-0)

=400