Question

o Practice for chapters covering costs. This is math practice so you can become more comfortable with margins and formulas used in economics 1. Fill in the chart and draw the TC, FC, and VC TC Quantity TC FC VC 0 5.00 1 5.50 6.50 3 8.00 10.00 12.50 4 6 15.50 19.00 23.00 7 8 6 3 27.50 32.50 9 10 Q 10 2. Fill in the chart and draw the ATC., AVF, and AFC TC 35 33 30 27 24 21 Quantity TC ATC AVC AFC 0 5.00 1 5.50 6.50 3 8.00 18 15 10.00 5 12.50 12 6 15.50 7 19.00 3 23.00 27.50 32.50 8 2 3 4 10 Q 10 AFCEECIO ATC: TCIQ AYC EVCIG

please explain !

can you explain as well?

Answer 1

1. Ans:

Quantity	TC	FC	VC
0	5.00	5.00	0
1	5.50	5.00	0.50
2	6.50	5.00	1.50
3	8.00	5.00	3.00
4	10.00	5.00	5.00
5	12.50	5.00	7.50
6	15.50	5.00	10.50
7	19.00	5.00	14.00
8	23.00	5.00	18.00
9	27.50	5.00	22.50
10	32.50	5.00	27.50

Explanation:

36.00 33.00 30.00 27.00 O 24.00 $ 21.00 TC, FC & VC 2 15.00 000 1T 12.00 6.00 m 0.00 0 1 2 3 4 7 8 9 10 11 5 6 QUANTITY

TC = FC + VC

Fixed cost is available even at zero level of production and remains constant throughout the production process.

So FC curve is horizontal.

There is no variable cost at zero level of output. Variable cost varies with production.

2. Ans:

Quantity	ATC	AVC	AFC
0	--	--	--
1	5.50	0.50	5.00
2	3.25	0.75	2.50
3	2.67	1.00	1.67
4	2.50	1.25	1.25
5	2.50	1.50	1.00
6	2.58	1.75	0.83
7	2.71	2.00	0.71
8	2.88	2.25	0.63
9	3.06	2.50	0.56
10	3.25	2.75	0.50

Explanation:

6.00 5.00 4.00 III TITUTI ATC, AVC & AFC III 3.00 2.00 TI TUTT IIIIIIIIIIIII TE 1.00 TTTTT LLIT LIETTI TUTTITUT 0.00 m 0 1 2 3 4 7 8 9 10 11 5 6 QUANTITY

ATC = TC / Q

AFC = FC / Q

AVC = VC / Q

The shape of the AFC curve is rectangular hyperbola whereas the shape of the ATC curve is 'U' shape.