Fill in the table below. Assume TC stands for Total Cost, TFC as Total Fixed Cos

Question

Fill in the table below. Assume TC stands for Total Cost, TFC as Total Fixed Cost, TVC as Total Variable Cost, ATC as Average Total Cost, AFC as Average Fixed Cost, AVC as Average Variable Cost, and MC as Marginal Cost.

Unit
of
Output    TC    TFC    TVC   ATC    AFC    AVC      MC
-------------------------------------------------------------------------------------------------------

0            20
1                               1
2                                                                       3
3                                                             4
4                                       12
5            75
6                                                            16
7                                       24
8                                                                       86
9                             360

Explanation / Answer

Basically, we want to first find fixed cost because the fixed cost is always the same for the quantity of output (hence "fixed" cost). We see that at 0 units of output (when we are not producing), the total cost is given to us (20). At 0 units of output, there is only the fixed cost. Thus, the fixed cost is $20. This can be filled in for the rest of the fixed cost columns, and average fixed cost can also be calculated because that's simply fixed cost divided by the units of output. Then, we look at what is given to us. We can find total cost by adding total variable cost with total fixed cost, or by multiply by the units of output the average total cost, whichever is given. We can also find total cost based on the marginal cost - for the second unit of output, we see that there is a marginal cost given of 3. This means that the total cost will be 3 units more than that of the last unit. We found out that at one unit, the total cost is 21, so this means that the total cost of the second unit is 24. We can find total variable cost by multiplying the average variable cost by the units of output as well. And we can reverse it and find average variable cost through dividing total variable cost by the units of output. Following these steps, you should get the below answers for the table. 126 Units of Output
TC TFC
TVC
ATC
AFC
AVC
MC
0 20 20 0
- -
- -
1 21 20 1 21 20 1 1 2 24 20 4 12 10 2 3 3 32 20 12 32/3 20/3 4 8 4 48 20 28 12 5 7 16 5 75 20 55 15 4 11 27 6 116 20 96 58/3 10/3 16 41 7 168 20 148 24 20/7 148/7 52 8 254 20 234 127/4 5/2 117/4 86 9 380 20
360 380/9
20/9 40
126

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