Wednesday, August 1 10:44 AM FlipltEcon macmillan learning Copy of Principles of

Question

Wednesday, August 1 10:44 AM FlipltEcon macmillan learning Copy of Principles of Eastern Washington University Unit 17: Prelecture/ Bridge Problems/ Problems: Cost Analysis Deadline: 100% until Thursday, August 2 at 11:00 PM 2) Defining variable and total costs 1) Which of the following is a varlable cost? a) membership dues for a professional organization b) property taxes for a retail store in a strip mall c) liability insurance for a construction company d) parking ticket fees for a delivery company Submit

Explanation / Answer

2) Variable costs are expenses one which changes with production output. These may increase or decrease with cost of production.

Answer: parking ticket fees for a delivery company.

3) Marginal cost = change in VC/ Change in price

MC = (70-55)/(3-2)

MC = 15$

Answer :15$

4) Average variable cost = AVC = Total variable cost / output

TVC = 200000

Output =50000

AVC = 200000/50000

AVC = 4$

Answer :4$

5) If the total output increase the average fixed cost will decrease as the fixed costs will be same for all the units of output. So the average fixed cost will decrease.

Answer : Average fixed cost.

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