Question

Question 9 6 pts The chart below shows production costs including fixed costs, variable costs, and total costs, marginal costs, avg. variable costs and avg. total costs, for a firm in the short run. Use this chart to answer the following questions. Quantity VC MC AVC FC SO TC 50 ATC 0 1 10 10 SO 2 3 A 100 110 50 20 4 50 130 B 5 С 120 40 34 The "A" in the chart is equal to (Select] The "B" in the chart is equal to (Select] The "C" in the chart is equal to Select)

Answer 1

Question 9

a)To find A

We know fixed cost is constant at 50

A is the total cost when quantity is 1

Fixed cost when quantity is 1=50(const)

Total cost=fixed cost+variable cost=50+10=60

b)To find B

Marginal cost is the cost to produce one extra unit

To find marginal cost at 4 units we find the difference between total cost of producing 4 units and total cost of producing 3 units which gives the marginal cost to produce that one extra unit from 3 units.

Therefore B=TC4-TC3=130-110=20

c)C is fixed cost at 5 units which is constant over whole production

C=50

Question 11

Answer is d always decreases because same total fixed cost is divided by increasing output

We know fixed cost remains cost over all outputs.

As output Quantity increases fixed cost remains same.

Average fixed cost is ratio of total fixed cost and quantit(AFC= TFC/quantity).Total fixed cost is constant.As quantity increases Average fixed cost decreases always.