QUESTION 4 2 pc Quantity Average Fized Cost Variable Cost Total Cost Average Fix

Question

QUESTION 4 2 pc Quantity Average Fized Cost Variable Cost Total Cost Average Fixed Marginal Cost of Average Total Cost Variable Cost cakes Cost 1 $38 $13 $28 $70 a Aus N $64 $110 $108 $133 7 $185 What is the fixed cost of production at Betty's Bakery? What is the variable cost of producing 5 cakes at Betty's Bakery? What is the total cost of producing 2 cakes at Betty's Bakery? What is the average variable cost of producing 3 cakes at Betty's Bakery? What is the average total cost of producing 2 cakes at Betty's Bakery? What is the marginal cost of the 8th cake at Betty's Bakery?

Explanation / Answer

Answer
Q1
Fixed cost=TC-VC=38-13=25

Q2
VC(5)=TC(5)-FC=110-25=85

Q3
TC=FC+VC=25+28=53

Q4
AVC=VC/Q and VC=TC-FC=70-25=45
AVC=45/3=15

Q5
AVC(2)=28/2=14
Q6
VC(8)=TC-FC=185-25=160
MC(8)=VC(8)-VC(7)=160-133=27

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