Suppose that your colleague has accidentally spilled coffee on his laptop and th

Question

Suppose that your colleague has accidentally spilled coffee on his laptop and the file containing your firm's cost data has been damaged. Use your knowledge of cost functions to save the day (and your friend's job) by determining the missing cost data. Round your answers to 2 digits after the decimal Quantity Marginal Cost Fixed Cost Variable Cost Total Cost AFC AVC ATC S45.00 $72.00 $95.00 4 $30.00 $412.00 What is the total cost when producing zero units? What is the marginal cost for the first unit? What is the average total cost of the 3rd unit? What is the average variable cost for the 4th unit? Number Number Number Number

Explanation / Answer

The following formulas were used.

MC = TCN-TCN-1

ATC = TC/Q

AFC=FC/Q or FC=AFC*Q

ATC=TC/Q or TC=ATC*Q

AVC=VC/Q or VC=AVC*Q

TC at Q=0 is 30

MC at Q=1 is 45

ATC at Q=3 is 41.7

AVC at Q=4 is 95.5

Q MC FC VC TC AFC AVC ATC 0 30 0 30 1 45 30 45 75 30 45.0 75.0 2 27 30 72 102 15 36.0 51.0 3 95 30 95 125 10 31.7 41.7 4 287 30 382 412 7.5 95.5 103.0

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