Homework: module 4 homework Score: 1.33 of 6 pts & Concept Question 2.1 ( 3 of 5

Question

Homework: module 4 homework Score: 1.33 of 6 pts & Concept Question 2.1 ( 3 of 5 (5 complete) v > Let F be the fixed cost of production, let VC be the variable cost of production, C be the total cost, MC be the marginal cost, AFC, the average fixed cost, AVC, the average variable cost, and AC, the average cost. Co responses rounded to two decimal places.) Output (q) E VCC MC AFC AVC AC $100 $16 $116 S16 S100.00 $16.00 $116.00 100 28 128 12 50.00 14.00 64.00 100 36 1368 33.33 12.00 120 100 40 300 4 25.00 10.00 35.00 10048 148 8 20.00 48 29.60 100 12 16.67 10.00 26.67 100 76 176 12.50 14.29 10.86 25.14 100 96 196 12.50 12.00 24.50 100 120 220 24 11.11 13.33 24.44 100 148 840 28 10.00 14.8084 do co y a un b w N 300 160

Explanation / Answer

1. Calculate Fixed cost at 2 units of output -

Fixed cost remains same irrespective of the level of output produced.

Fixed cost at 1 unit of output is $100. This will remains same at 2 units of output as well.

So,

The fixed cost at 2 units of output is $100.

2. Calculate the AC at 3 units of output -

C at 3 units of output = 136

AC = C/3 = 136/3 = 45.33

The AC at 3 units of output is 45.33

3. Calculate the C at 4 units of output -

F at 4 units of output = 100

VC at 4 units of output = 40

C = F + VC = 100 + 40 = 140

The C at 4 units of output is 140.

4. Calculate the AVC at 5 units of output -

VC at 5 units of output = 48

AVC = VC/5 = 48/5 = 9.6

The AVC at 5 units of output is 9.6

5. Calculate the VC at 6 units of output -

F at 6 units of output = 100

C at 6 units of output = 160

VC = C - F = 160 - 100 = 60

The VC at 6 units of output is 60.

6. Calculate the MC at 7 units of output -

C at 6 units of output = 160

C at 7 units of output = 176

MC = C at 7 units of output - C at 6 units of output = 176 - 160 = 16

The MC at 7 units of output is 16.

7. Calculate the AFC at 8 units of output -

F at 8 units of output = 100

AFC = F/8 = 100/8 = 12.50

The AFC at 8 units of output is 12.50

8. Calculate the C at 10 units of output -

F at 10 units of output = 100

VC at 10 units of output = 148

C = F + VC = 100 + 148 = 248

The C at 10 units of output is 248.

9. Calculate the AC at 10 units of output -

C at 10 units of output = 248

AC = C/10 = 248/10 = 24.8

The AC at 10 units of output is 24.8

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