. Answer the questions below given the following quantity output and cost data.
ID: 1095499 • Letter: #
Question
. Answer the questions below given the following quantity output and cost data. Show your calculations.
Total Product (Q): 0 1 2 3 4 5 6
Total Cost (TC): $50 $80 $105 $125 $155 $195 $250
(10 points)
a. What is average variable cost of producing three units of output?
b. What is the average fixed cost of producing 2units?
c. What is the marginal cost of producing the sixth unit of output?
d. What is the average total cost of 5 units of output is:
e. Diminishing marginal returns are incurred when output is increased from___ to ______.
Explanation / Answer
a) AVC for quantity 3 is 25.
b) AFC at quantity 2 is 25.
c) The marginal cost of prosucing 6th output is 55
d) ATC or AC of 5th unit is 39.
e) Dimnishing marginal returns starts after 4th unit after which the average cost (AC) starts increasing.
Q Total cost(TC) Fixed cost(FC) Variable cost(VC) MC AVC=VC/Q AC=TC/Q AFC=FC/Q 0 50 50 0 1 80 50 30 30 30 80 50 2 105 50 55 25 27.5 52.5 25 3 125 50 75 20 25 41.66667 16.66667 4 155 50 105 30 26.25 38.75 12.5 5 195 50 145 40 29 39 10 6 250 50 200 55 33.3333333 41.66667 8.333333Related Questions
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