14. Su ppose for a week of production a firm produces 10 wooden tables. For the

Question

14. Su ppose for a week of production a firm produces 10 wooden tables. For the week the firm had the following costs: Build lease cost, $100 per week Labor costs (without worker contracts), $1400 during the week Materials used in production, $500 during the week For the week the Average Fixed Cost (AFC) for each table would be: $ .For the week the Average Variable Cost (AVC) for each table would be: $ . For the week th . For the week the Average Total Cost (ATC) for each table would be: $ 15. Because of monopoly, consumers typically have: a. fewer choices

Explanation / Answer

Lease cost is fixed, since the per-unit amount is constant.

Labor and material costs are variable, since these depend on production units.

AFC = Lease cost per week / Number of tables per week

        = $100 / 10

        = $10 (Answer)

AVC = Total variable cost / Number of tables

         = (Labor + Material) / 10

         = ($1,400 + $500) / 10

         = $1,900 / 10

         = $190 (Answer)

ATC = AFC + AVC

         = $10 + $190

         = $200 (Answer)

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