Webby Inc. is a web development company. Webby\'s monthly production function fo

Question

Webby Inc. is a web development company. Webby's monthly production function for developing websites is given in the table below Webby pays $4,000 a month in rent for office space and equipment. It pays each programmer $2,000 a month. There are no other production costs. Fill in the table of production costs. Instructions: Round your answers to the nearest dollar Answer is complete but not entirely correct. Total cost 4,000 6,000 2,000 4,000 8,000 6,000 10,000 8,000 12,000 0,00014,000 12,000 16,000 4,000 2,000 1,333 1,000 800 6,000 4,000 2,000 3,000 2,800 2,667 2,000 2,000 2,000 2,000 2,000 2,000 6,000 2,000 14 20 24 26 750 560 445 4

Explanation / Answer

Note that  

Marginal Cost: It is the first derivative of the total cost with respect to the output

Average variable cost: It is defined as variable cost per unit of output produced

Average fixed cost: It is defined as fixed cost per unit of output produced.

Variable cost varies with the level of output. It is the difference between total cost and fixed cost for each level of output.

Average total cost: It is the total cost divided by the number of units produced.

Fixed cost A firm bears a fixed cost which remains constant for any number of units of output produced. This cost does not change with the level of output since it has to be paid whether the firm operates or not.

Total cost of producing a unit of product is the sum of fixed cost and variable cost of producing that unit.

Programmers Websites Variable cost Total fixed cost Total cost AFC AVC ATC MC 0 0 0 4000 4000 1 2 2000 4000 6000 2000.00 1000.00 3000.00 1000.0 2 6 4000 4000 8000 666.67 666.67 1333.33 500.0 3 14 6000 4000 10000 285.71 428.57 714.29 250.0 4 20 8000 4000 12000 200.00 400.00 600.00 333.3 5 24 10000 4000 14000 166.67 416.67 583.33 500.0 6 26 12000 4000 16000 153.85 461.54 615.38 1000.0

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