Sapling Learning Suppose that your colleague has accidentally spilled coflee on

Question

Sapling Learning Suppose that your colleague has accidentally spilled coflee on his laptop and the file contain cost data has damaged. Use your knowledge of cost functions to save the day (and your tnend's firm's Marginal Cost | Fixed Cost | Variable Cost | Total Cost AFC AVC ATC $50.00 $74.00 $105.00 $20.00 What is the total cost when producing zero units? ng zerotherirst unitt foraf the ird unir ostar unie coast fer fie What is the marginal cost the first unit? What is the average total cost of the 3rd unit? What is the average variable cost for the 4th unit? o Give up s View

Explanation / Answer

Answer :-

Notes :- i). Average fixed cost (AFC) = Total fixed cost (TFC) / Quantity.

ii). Average variable cost (AVC) = Total variable cost (TVC) / Quantity.

iii). Average total cost (ATC) = Average fixed cost (AFC) + Average variable cost (AVC)

OR

Average total cost (ATC) = Total cost (TC) / Quantity.

Question 1). Answer :- Total cost of producing zero units = $ 20.

Question 2). Answer :- Marginal cost for first unit = $ 50.

Question 3). Answer :- Average total cost (ATC) of third unit = $ 199.

Question 4). Answer :- Average variable cost (AVC) of fourth unit = $ 90.

Quantity Marginal cost Fixed cost Variable cost Total cost AFC AVC ATC 0 - 20 - 20 - - - 1 50 (70 - 20) 20 50 (50 * 1) 70 (50 + 20) 20 50 70 2 24 (94 - 70) 20 74 94 10 37 47 3 105 20 179 (199 - 20) 199 (94 + 105) 6.7 59.7 66.4 4 181 (380 - 199) 20 360 (380 - 20) 380 5 90 95

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