The following table shows the daily relationship between the number of workers a

Question

The following table shows the daily relationship between the number of workers and output (Q) for a small factory in the short run, with capital held constant. Each worker costs $100 per day, and the firm has fixed costs of $100 per day. (Round your answers to two decimal places)

1. Calculate total cost (TC),

2. Calculate marginal cost (MC)

3. Calculate average total cost (ATC).

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Workers Q TC MC ATC

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0 0     ___ --- ---

1 20 ___ ___ ___

2 44 ___ ___ ___

3 70 ___ ___ ___

4 91 ___ ___ ___

5 100 ___ ___ ___

Explanation / Answer

We have: Total Cost= Fixed Cost + Variable Cost.

Here Fixed Cost = $100 and Variable cost is $ 100 per worker.

Average total cost= total cost / output.

Marginal cost= Change in total cost / change in output.

Thanks and regards.

Workers Quantity Total Cost Marginal Cost Averge Total Cost 0 0 100 100 1 20 200 5 10 2 44 300 7.142 6.818 3 70 400 4.166 5.714 4 91 500 9.09 5.494 5 100 600 11.11 6

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