Q1. Your cousin Zenzo owns a painting company with fixed costs of P200 and the following schedule for variable costs:
QUANTITY OF HOUSES PAINTED PER MONTH
1 2 3 4 5 6 7
Variable costs P10 P20 P40 P80 P70 P65 P64 Calculate, average variable cost, average fixed cost and average total marginal cost for every amount. Explain what is the efficient scale of the painting company if one house costs P300 to be painted?
Q2. Healthy Ozenzo's Juice Bar has the following cost schedules:
Q (VATS) VARIABLE COST TOTAL COST
0 0 30
1 10 40
2 25 55
3 45 75
4 70 100
5 100 130
6 135 165
a. Find the fixed cost?
b. Calculate average variable cost, average total cost, and marginal cost for each quantity
c. Graph all three curves. What is the relationship between the marginal-cost curve and the average total cost curve? Explain relation among the marginal-cost curve and the average-variable-cost curve?