Sara runs a small business assembling personal computers. This table shows her total cost at different levels of output.
|
|
Number of computers
produced
|
Total cost
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
1,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
1,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
1,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
2,120
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1. What is Sara's fixed cost?
2. Calculate Sara's average fixed cost (AFC) when she produces four computers.
3. Calculate Sara's variable cost (VC) when she produces four computers.
4. Calculate Sara's average variable cost (AVC) when she produces four computers.
5. Calculate Sara's average total cost (ATC) when she produces four computers.
6. Calculate Sara's marginal cost (MC) of producing the fourth computer.
7. Calculate Sara's marginal cost (MC) of producing the fifth computer.