Aplia Homework: Production, Inputs, and Cost: Building Blocks for Supply Analysi

Question

Aplia Homework: Production, Inputs, and Cost: Building Blocks for Supply Analysis Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company's total cost of production at various production Fal in the remaining cells of the table. Total Fixed Cost Marginal (Variable) Average Variable Quantity Cost Cost Average Cost (Dollars per (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) 120 200 240 40 On the following graph, plot Dougias Fur's average cost (AC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal (variable) cost (MVC) curve using the arange points (square symbog. (Mist For AC and AVC, plot the points on the integer: For example, the average cost of producing one pair of boots is s20o, so you should start your average cost curve by placing a green point at (, 200). For marginal (variabve) cost piot the points between the integers: For example, the marginal (variabie) cost of increasing production from zero to one pair of boots is s80, so you should start your marginal (variable) cost curve by placing an orange square at (o.s, ao).) Note: Plot your points the order i, which you would ik. them connected. Line segments wi·conect the points Momatically. QUANTITY OF OUTPUT (Pairs of boos) Type here to search

Explanation / Answer

TFC=TC at output=0

TVC=TC-TFC

MC=Change in TC/Change in Q

AVC=VC/Q

AC=TC/Q

Q TC TFC TVC MC AVC AC 0 120 120 0 - - - 1 200 120 80 80 80 200 2 240 120 120 40 60 120 3 285 120 165 45 55 95 4 340 120 220 55 55 85 5 425 120 305 85 61 85 6 540 120 420 115 70 90

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