The accompanying table shows a boat manufacturer's total cost of producing boats.
|
Quantity of Boats
|
Total Cost
|
|
0
|
$ 450,000
|
|
1
|
$ 490,000
|
|
2
|
$ 510,000
|
|
3
|
$ 520,000
|
|
4
|
$ 540,000
|
|
5
|
$ 570,000
|
|
6
|
$ 610,000
|
|
7
|
$ 670,000
|
|
8
|
$ 750,000
|
|
9
|
$ 870,000
|
1. What is this manufacturer's fixed cost?
2. For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC).
|
Qty of boats
|
Total Cost
|
Variable Costs
a.
|
Average Variable Costs
b.
|
Average Total Costs
c.
|
Average Fixed Cost
d.
|
|
0
|
$450,000
|
-
|
-
|
-
|
-
|
|
1
|
490,000
|
|
|
|
|
|
2
|
510,000
|
|
|
|
|
|
3
|
520,000
|
|
|
|
|
|
4
|
540,000
|
|
|
|
|
|
5
|
570,000
|
|
|
|
|
|
6
|
610,000
|
|
|
|
|
|
7
|
670,000
|
|
|
|
|
|
8
|
750,000
|
|
|
|
|
|
9
|
870,000
|
|
|
|
|
3. What is the minimum-cost output?