Question

You are given the following information on a firm's output and cost. Answer the questions below based on the table.

Total Product	Fixed Cost	Variable Costs	Total Costs
0	$1,000	$0	$
1	$1,000	$25	$
2	$1,000	$75	$
3	$1,000	$150	$
4	$1,000	$275	$
5	$1,000	$475	$
6	$1,000	$775	$
7	$1,000	$1,225	$
8	$1,000	$1,925	$
9	$1,000	$2,925	$
10	$1,000	$4,375	$

Part A: Complete the Total Cost Column in the table above.

Part B: Instructions: If necessary round your answer 2 decimal places.

1. What is the marginal cost of producing the first unit of output? $

2. What is the average fixed cost of producing the fifth unit of output? $

3. What is the average variable cost of producing the seventh unit of output? $

4. What is the average total cost of producing the ninth unit of output? $

Answer 1

Total Product	Fixed cost	Variable Cost	Total Cost	Marginal Cost
0	1000	0	1000	----
1	1000	25	1025	25
2	1000	75	1075	50
3	1000	150	1150	75
4	1000	275	1275	125
5	1000	475	1475	200
6	1000	775	1775	300
7	1000	1225	2225	450
8	1000	1925	2925	700
9	1000	2925	3925	1000
10	1000	4375	5375	1450

Total cost = Fixed cost + Variable cost

Marginal cost = (Change in total cost / Change in a total product)

1. The marginal cost of producing the first unit of output is $25.

2. Average fixed cost = Fixed cost / Total Product

Average fixed cost of producing the fifth unit of output = ($1000 /5)

Average fixed cost of producing the fifth unit of output = $200

3. Average variable cost = Variable cost / Total Product

The average variable cost of producing the seventh unit of output = ($1225 / 7)

The average variable cost of producing the seventh unit of output = $175

4. Average total cost = Total Cost / Total Product

The average variable cost of producing the ninth unit of output = ($3925 / 9)

Average variable cost of producing the ninth unit of output = $436.11