Question

The table below outlines some data obtained from a firm's research on their costs when producing certain quantities of output. The firm has a fixed cost of $14,000 for the following data. Complete the following question. (If necessary round your answers to two decimal places.) (a) Fill in the blanks in the following table. Units of Output Total Fixed Cost Total Variable Cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 70 0 0 110 120 200 210 220 230 240 16,800 17,600 18.000 22,000 23,100 24,200 25.300 26,400 OOOO 0 0 0 0 (b) Graph your answer for total fixed cost on the graph below. Select the curve you wish to graph from the drop-down box at the top of the graph. (You must plot all points to receive full marks.) - Total Fixed Cost 320007 28000 240001 20000F Cost ($) 16000 12000 HT 8000 400013 30 0 Reset 60 90 120 160 Units of Output 180 210 240

Answer 1

(a)

• TFC = 14,000
• TVC = TC - TFC
• MC = Change in TC / Change in Q
• AFC = TFC/Q
• AVC = TVC/Q
• ATC = TC/Q

Q	TFC	TVC	TC	MC	AFC	AVC	ATC
70	14,000	2,800	16,800		200	40	240
110	14,000	3,600	17,600	20	127.27	32.73	160
120	14,000	4,000	18,000	40	116.67	33.33	150
200	14,000	8,000	22,000	50	70	40	110
210	14,000	9,100	23,100	110	66.67	43.33	110
220	14,000	10,200	24,200	110	63.64	46.36	110
230	14,000	11,300	25,300	110	60.87	49.13	110
240	14,000	12,400	26,400	110	58.33	51.67	110

(b) Graph

- Total Fixed Cost 320001 28000T 24000 Cost ($) TC 120007 TFC 8000F 4000F TVC 0 Reset 30 60 90 120 150 Units of Output 180 210 240