h. What is the average fixed cost (AFC) of producing 450 units of output? k. Wha
ID: 1104096 • Letter: H
Question
h. What is the average fixed cost (AFC) of producing 450 units of output? k. What is the shape of the average-fixed-cost curve? Hint: Recall the denominator here is the outputQ not labor Hint: Draw graph and comment on the shape using the same process as described in the earlier question j, but with average fixed-cost on vertical axis] (3 points) Compute and fill-up the below table (the cells highlighted in yellow): Hint The yellow highlighted cells in column 2 (Output) and column 3 (Marginal product) are obtained from earlier sub-questions a through e. While computing the yellow highlighted cells in columns 7 (avg fixed cost) through column 10 (marginal cost), make sure the denominator is output Q (or change in output AQ for marginal cost) and not the labor. Recall that only for finding marginal product, you would use change in labor (input) in the denominator. Some numbers may look too small for average columns.] · I. What is the shape of the average-variable-cost curve? Hint: Draw graph and comment on the shape using the same process as described in the earlier question j, but with average variable-cost on vertical axis) Col 10 Average Fixed Total Average Average A Labor fixed variable tot Marginal cost ProductCost Coscost | | 200 200 | S20 | $10 S40 $10 S60 $10 80 S10 25 S100 sI0 S120 S10 m. What is the shape of the average-total-cost curve? Hint: Draw graph and comment on the shape using the same process as described in the earlier question j, but with average total-cost on vertical axis 2 350 3 450 50 6 530 j. What is the shape of the firm's total-cost curve? n. What is the shape of the marginal-cost curve? Hint: From the above table, graph total-cost on vertical axis and output on horizontal axis, Then comment the shape of the graph. You may scale the y-axis if needed (multiply by 100). An approximate curve will do.J Hint: Draw graph and comment on the shape using the same process as described in the earlier question j, but with marginal-cost on vertical axis) 12. 13Explanation / Answer
h. AFC = 0.02 at Q = 450
i.
j. TC is U shaped
k. AFC is rectangular hyperbola
Note: max. 4 parts at a time
L Q MP VC FC TC AFC AVC ATC MC 0 0 - 0 10 10 1 200 200 20 10 30 0.05 0.10 0.15 0.10 2 350 150 40 10 50 0.03 0.11 0.14 0.13 3 450 100 60 10 70 0.02 0.13 0.16 0.20 4 500 50 80 10 90 0.02 0.16 0.18 0.40 5 525 25 100 10 110 0.02 0.19 0.21 0.80 6 530 5 120 10 130 0.02 0.23 0.25 4.00Related Questions
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