Question

1. The schedule below gives the Total Variable Cost (TVC) for producing various quantities of smurfs (smurfs are an input into cat food production). The Total Fixed Costs (TFC) is $100. Calculate the following and fill in the blanks: Total Cost (TC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Cost Schedule for Smurf Production Output Quantity (Smurfs Per Week) TVC TC AFC AVC ATC MC 100 110 119 127 134 140 145 100.00 50.00 33.33 25.00 20.00 16.67 10.00 9.50 9.00 8.50 8.00 7.50 45 50 56 80 11 12 13 14 15 16 101 113 126 17 18 19 9 20 140 155 171 188 206 225 245 266 288 5.26 5.00 4.76 17 18 19 22 288 306 325 345 366 388 .89 10.30 10.71 11.14 11.57 12.00 15.16 15.30 15.48 15.68 15.91 16.17 4.55 4.35 4.17 20 21 22

How to calculate the Total Cost (TC), Average Fixed Cost (AFC), Average Total Cost (ATC), and Marginal Cost (MC)?

Answer 1

TC = TFC + TVC

AFC = Total Fixed Cost (TFC)/output

AVC = Total Variable Cost(TVC)/output

ATC = Total Cost/output

MC = Change in Total Cost/ Change in output

Output TVC TC AFC AVC ATC MC

0 0 100

1 10 110 100 10 110 10

2   19   119 50 9.50    59.5 9

3 27 127 33.33 9.00 42.3 8

4 34   134 25.00 8.50 33.5 7

5 40 140 20.00 8.00 28 6

6   45   145 16.67 7.50 24.16 5

7 50 150 14.28 7.14 21.42 5

8 56 156 12.5 7 19.5 6

9 63 163 11.11 7 18.11 7

10 71 171 10 7.1 17.1 8

11 80 180 9.09 7.27 16.36    9

12 90 190 8.33 7.5 15.83 10

13 101 201 7.69 7.76 15.46    11

14 113 213 7.14 8.07 15.21 12

15 126 226 6.66 8.4 15.06 13

16 140 240 6.25 8.75 15    14

17 155 255 5.88 9.11 15 15

18 171 271 5.55 9.5 15.05 16