Karen runs a print shop that makes posters for large companies. It is a very com
ID: 1192593 • Letter: K
Question
Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1.00 per poster. She has fixed costs of $100.00. Her variable costs are $1,500 for the first thousand posters, $1,200 for the second thousand, and then $800 for each additional thousand posters.
What is her AFC per poster if she prints 1,000 posters?
Instructions: Round your answer to two decimal places.
$
What is her AFC per poster if she prints 2,000 posters?
Instructions: Round your answer to three decimal places.
$
What is her AFC per poster if she prints 10,000 posters?
Instructions: Round your answer to three decimal places.
$
What is her ATC per poster if she prints 1,000?
Instructions: Round your answer to two decimal places.
$
What is her ATC per poster if she prints 2,000?
Instructions: Round your answer to three decimal places.
$
What is her ATC per poster if she prints 10,000?
Instructions: Round your answer to three decimal places.
$
Explanation / Answer
TFC=100
AFC=TFC/Q
Thus,
When Q=1000, AFC= 100/1000= 0.10
When Q=2000, AFC= 100/2000= 0.05
When Q=1000, AFC= 100/10000= 0.01
When Q=1000, TC= TFC + TVC = 100 + 1500 = 1600. ATC = TC/Q = 1600/1000= 1.6
When Q=2000, TC= TFC + TVC = 100 + (1500+1200) = 2800. ATC = TC/Q = 2800/2000= 1.4
When Q=1000, TC= TFC + TVC = 100 + (1500+1200+800*8) = 9200. ATC = TC/Q = 9200/10000= 0.92
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