Question

Fill in the remaining cells of the following table. Quantity (Pairs) Total Cost (Dollars) Marginal Cost (Dollars) Fixed Cost (Dollars) Variable Cost (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $160, so you should set your ATC curve by placing a green point at(1, 160). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $100, so you should start your MC curve by placing an orange square at (0.5, 100).)

Answer 1

The answers are given below,

Total Cost Marginal Cost Fixed Cost Varible Cost AVC ATC 60 60 100 160 100 100 160 220 160 270 210 340 280 110 450 390 180 630 570 105

Explanation

Marginal Cost is found by subtracting Total cost of (i-1)^th unit from Total Cost of i^th unit.

Fixed Cost the total cost when quantity is 0. The fixed cost remains same throughout.

Variable Cost is Total Cost - Fixed Cost.

AVC = Variable Cost/Qty

ATC = Total Cost/Qty

Graph

250 200 150 100 A ATC AVC MC