Question:
(a) Complete the following table of costs for a firm. (Note: enter the figures in the MC column between outputs of 0 and 1, 1 and 2, 2 and 3, etc.)
|
Output (Units)
|
TC ($)
|
AC ($)
|
MC ($)
|
|
0
|
55
|
-
|
|
|
|
|
30
|
|
1
|
85
|
85
|
|
|
|
|
25
|
|
2
|
110
|
55
|
|
|
|
|
20
|
|
3
|
130
|
43.3333333
|
|
|
|
|
30
|
|
4
|
160
|
40
|
|
|
|
|
50
|
|
5
|
210
|
42
|
|
|
|
|
70
|
|
6
|
280
|
46.6666667
|
|
|
|
|
90
|
|
7
|
370
|
52.8571429
|
|
|
|
|
110
|
|
8
|
480
|
60
|
|
|
|
|
130
|
|
9
|
610
|
|
|
|
|
|
150
|
|
10
|
760
|
76
|
|
(b) How much is total fixed cost at:
(i) an output of 0 units ?
(ii) an output of 6 units?
(c) How much is average fixed cost at:
(i) an output of 5 units?
(ii) an output of 10 units?
(d) How much is total variable cost at an output of 5 units?
(e) How much is average variable cost at an output of 10 units?
Answer:
(b)
i) 55
ii) 55
(c)
(i) 55/5 = 11
(ii) 55/10 = 5.5
d) 210 - 55 = 155
e) 76- 5.5 = 20.5