Question

Suppose that your colleague has accidentally spilled coffee on his laptop and the file containing your firm's cost date has been damaged. Use your knowledge of cost functions to save the day and you friend's job, by determining the missing cost dota Cost Schedule Output Marginal Total Total Total Average Average Average Cost Foed be var Total cos cost cost OD 105 30 The average total cost of the 3rd unit of OUTDULI Please do not input the son your newer is $400 please mot 400

Answer 1

Fixed cost remains same at each level of output. So, fixed cost will be $30 at 3rd unit of output.

Marginal cost of 3rd unit of output = $105

Variable cost of 2nd unit of output = $72

Variable cost at 3rd unit of output = Variable cost at 2nd unit of output + Marginal cost at 3rd unit of output.

Variable cost at 3rd unit of output = $72 + $105

Variable cost at 3rd unit of output = $177

Total cost at 3rd unit of output = Variable cost at 3rd unit of output + Fixed cost at 3rd unit of output

Total cost at 3rd unit of output = $30 + $177

Total cost at 3rd unit of output = $207

Average total cost of the 3rd unit of output = (Total cost at 3rd unit of output / 3)

Average total cost of the 3rd unit of output = ($207 / 3)

Average total cost of the 3rd unit of output = $69

The Average total cost of the 3rd unit of output is $69.

Answer: 69