Question

4. If fixed costs are $100 and variable costs are $200 at an output level of 30 units, what are the average fixed costs, average variable costs, and average total costs?

*Please show all work this time.

Quantity	Fixed Cost	Total Cost	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
10	5,000	5,500
20	5,000	5,800
30	5,000	6,000
40	5,000	6,100
50	5,000	6,150
60	5,000	6,175

Answer 1

Ans.4. fixed costs (FC) $100 and variable costs (VC) $200 at an output level (Q) of 30 units,

Total cost (TC) = FC + VC

TC = $100 + $200

TC = $300

i) Average Fixed Cost (AFC ) = FC /Q

AFC = $100/30

AFC = $3.33

Average Fixed Cost is $3.33.

ii) Average Variable Cost (AVC ) = VC / Q

AVC = $200/30

AVC = $6.67

Average Variable Cost is $6.67.

iii) Average Total Cost (ATC ) = TC/ Q

ATC = $300/30

ATC = $10

Average Total Cost is $10.

Quantity	Fixed Cost	Total Cost	Variable Cost	Average Fixed Cost	Average Variable Cost	Average Total Cost	Marginal Cost
10	5,000	5,500	500	500	50	550	50
20	5,000	5,800	800	250	40	290	30
30	5,000	6,000	1,000	166.67	33.33	200	20
40	5,000	6,100	1,100	125	27.50	152.50	10
50	5,000	6,150	1,150	100	23	123	5
60	5,000	6,175	1,175	83.33	19.58	102.92	2.5

Working Note:

1) TC = FC + VC

2) VC = TC - FC

3) AFC = FC/Q

4) AVC = VC/Q

5) ATC = TC/Q

6) MC = change in TC/ change in Q

7) At Q = 0, TC = $5,000