Costs. a. Complete the following table.
|
Total Product (Q)
|
Total Fixed Cost
|
Total Variable Cost
|
Total Cost
|
Average Fixed Cost
|
Average Variable Cost
|
Average Total Cost
|
Marginal Cost
|
|
0
|
$60
|
$0
|
$60
|
-
|
-
|
-
|
-
|
|
1
|
$60
|
|
$105
|
|
|
|
|
|
2
|
|
$85
|
|
|
|
|
|
|
3
|
|
$120
|
|
|
|
|
|
|
4
|
|
$150
|
|
|
|
|
|
|
5
|
|
|
$245
|
|
|
|
|
|
6
|
|
$225
|
|
|
|
|
|
|
7
|
|
|
$330
|
|
|
|
|
|
8
|
|
$325
|
|
|
|
|
|
|
9
|
|
$390
|
|
|
|
|
|
|
10
|
|
|
$525
|
|
|
|
|
b. Draw one graph of ATC, AVC and MC. Draw another graph with TC.
c. What happens to ATC as Q increases?
d. Where does MC cross AVC? ATC?
e. Suppose fixed costs increase by $20. How will this affect TFC, TVC, TC, ATC, AVC and MC? Which numbers change and which stay the same?
f. Suppose raw material prices increase by 20%. How will this affect TFC, TVC, TC, ATC, AVC and MC?