Relationship between the costs:
Exhibit below shows a firm’s costs of production in the short run. First, complete Table below. Based on the Table, answer the following:
Question 1: Find TC, TFC and TVF for an output level of 3 units and 6 units.
Question 2: You know the TC of producing 6 units and the MC producing the 6th unit. Can you find the TC of producing 5 units?
Question 3: What would this firm’s TFC be at an output of 10 units? 15 units?
Question 4: Find AFC for output levels of 3 and 6 units. Are there 2 ways to get these numbers? Do they produce identical results?
Question 5: Replicate Exhibit 2 and shade the area the represents Total Cost of producing 3 units. Which part of it is TFC? TVC?
