You own a company that writes financial literacy applications (apps) for cellula

Question

You own a company that writes financial literacy applications (apps) for cellular phones. The fixed costs of operating your company are $12,000 per week and the variable costs are as follows: 2 Namber of Apps Writtes per week Total YonablCn sa000 S8.000 516,000532,000 s64,000 s128,000 5256,000 Total Cost Averag Fited Co Average Average Marginal Cost Calculate total cost, average fixed cost, average variable cost, average total cost. and marginal cost for each number of apps written per week. What number of applications is the most efficient to write each week?

Explanation / Answer

Answer

TC=TVC+TFC

FC=TC-VC

AFC=FC/Q

AVC=VC/Q

ATC=TC/Q

MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p

the number of applications is the most efficient to write each week is 3 because the average total cost is minimum at this quantity.

Q 1 2 3 4 5 6 7 TVC 4000 8000 16000 32000 64000 128000 256000 TC 16000 20000 28000 44000 76000 140000 268000 AFC 12000 6000 4000 3000 2400 2000 1714.286 AVC 4000 4000 5333.333 8000 12800 21333.33 36571.43 ATC 16000 10000 9333.333 11000 15200 23333.33 38285.71 MC 4000 4000 8000 16000 32000 64000 128000

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